The currency rallied from 3-week lows buoyed by the data and a return of positive risk sentiment to the market. The economic data has restored faith in the global economic recovery and boosted appetite for higher-yielding currencies such as the Kiwi.
Australian employment figures released this week were much stronger than expected. Predictions forecast an employment rise of 15,000 but data released for June has pegged the change at 45,900, more than three times bigger than predicted. The Australian Dollar jumped nearly a cent higher against the Kiwi and US Dollar and a similar proportion against the Pound. This is the lowest jobless rate as well as the fewest number of unemployed workers that the Australian market has seen since January 2009.
Investors believe that such data will force the Reserve Bank of Australia (RBA) to relook at its earlier announcement to leave interest rates unchanged at 4.5 per cent. Prior to the release of the job data Reserve Bank governor, Glenn Stevens described the move to keep interest rates on hold as ‘appropriate’ despite underlying inflation levels likely to be ‘in the upper half of the target zone over the next year.’
Australia also posted its third-highest trade surplus for May on continued strong demand from China and India. Both the Australian and New Zealand Dollar advanced to one-week highs against the Yen after stocks and commodities advanced, boosting demand for assets tied to growth.
AUD/ GBP: 0.5824
AUD/ EUR 0.6932
AUD/ USD: 0.8729
AUD/ JPY: 77.61
Exchange rates as of 08:10, 12 July 2010
www.australiantimes.co.uk/currency
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