Aussie surges as unemployment hits eight-year low


Employment change not quite so impressive

Australia’s unemployment rate fell to 4.9% in February, the lowest since May 2011, data released this morning showed. Granted, this was coupled with a dip in the participation rate to 65.6% from 65.7%, but nevertheless investors looked favourably on the numbers. The number of jobs added in the economy was not so robust, with a net plus-4,600 jobs, though all of the gains were in the part-time category, with a loss of 7,300 full-time jobs.

The markets focused on the better unemployment number and bought the Aussie up to a three-week high versus the US dollar. The greenback had been under pressure all week in the run-up to last night’s FOMC meeting, and that pressure intensified in the aftermath. AUD/USD is now at 0.7155 and has tested 100-day moving average resistance at 0.7162 but looks set to close above the 55-day moving average for the first time since February 26. Australian shares didn’t echo the boost in risk appetite, with the Australia200 index falling 0.34%.

AUD/USD Daily Chart

Source: OANDA fxTrade

Trump says tariffs will remain

Yesterday US President Trump stated that the US-China trade negotiations were “coming along nicely” and confirmed that US negotiators would be traveling to Beijing this weekend. However, he also stated that it is likely that the tariffs on Chinese goods would remain in place for “a long period of time” to ensure that China adheres to any terms and conditions in any new trade deal. I’m not sure how Beijing would react to that state of affairs with its seemingly one-sided approach. Let’s see what kind of reception the negotiators get in Beijing next week.

Asymmetric trade deal sinks Fed rally

Bank of England unlikely to excite

Unlike its US counterpart, today’s Bank of England meeting is unlikely to stir much activity in the markets. With the Brexit issue nearing, and still not resolved, the Bank has said it would wait to see how the economy reacts or evolves after Brexit. What would they do if Brexit was delayed for a longer period? Money markets are still erring on the hawkish side, though the chances of a hike by year-end are only at 34%.

What next for the BoE?

The rest of the calendar is populated by UK retail, consumer and producer prices for February together with retail sales for the same month. The US session sees only the Philadelphia Fed manufacturing survey on tap.

The full MarketPulse data calendar can be viewed at

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Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
Andrew Robinson

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