AUD/CAD, AUD/USD Fall on Positive Employment Data

06 January 2017 by News Desk   |   SHARE  

Friday was an interesting day in the market with the release of some high-profile US and Canadian data, while investors remained reactive to developments in European politics and central bank statements, say currency experts FC Exchange.

Australian Dollar to US Dollar (AUD/USD) Exchange Rate Movements

The Australian dollar (AUD) exchange rate had been able to climb in Thursday’s stateside trading following the release of softer-than-forecast US employment data. The US ADP employment change stat is usually seen as an indicator for the upcoming non-farm payrolls number which can cause massive market swings. The ADP employment figure fell below predictions and came in at 153k on Thursday and when paired with the Chinese yuan’s rebound, the Australian currency was offered a little strength.

However, Friday’s data release caused the greenback to rise against most other majors, reversing some of the Aussie dollar’s gains. Despite the US unemployment rate growing from 6.8% to 6.9% in December, the US economy managed to produce a healthy 156k jobs – falling just a little short from the 175k forecast. In addition, November’s reading was positively revised higher from 178,000 to 204,000.

Perhaps one of the most encouraging ecostats came in the form of US average hourly earnings which took a definite upswing, from 2.5% to 2.9%. Wage growth has struggled to pick up the world over following the Global Financial Crisis (GFC) and so positive news in growth in this reading is usually well received. Friday’s figure registered the quickest wages increase since 2009 – just after the GFC hit and unemployment remains under half of what it was at the peak of the recession. The news is favourable for president elect Donald Trump who’s due to take the reins of the US economy at the end of January.

Australian Dollar to Euro (AUD/EUR) Exchange Rate Fluctuations

The Aussie dollar climbed against the euro (AUD/EUR) on Friday, moving by around 0.25%. The euro wasn’t offered any favours when European Central Bank (ECB) Executive Board member Yves Mersch commented that despite positive economic data and rising inflation, the central bank shouldn’t make any sudden movements regarding monetary policy.

Mersch said: ‘It is absolutely premature to claim victory over a weak economy. We have good results but it is absolutely premature to say: drop the guard.’

Australian Dollar to Pound (AUD/GBP) Exchange Rate Roundup

The pound is likely to remain volatile for some time as the UK wades deeper into Brexit negotiations. Friday was weak in terms of UK domestic data, leaving sterling to react to other majors and geo-political developments.

A lot of movement is expected to occur towards the latter half of January as the market anticipates the Supreme Court ruling regarding the triggering of Article 50. Meanwhile, the AUD/GBP exchange rate may fluctuate in Monday’s Oceanic session with the release of the AIG Australian performance of construction index.

Australian Dollar to Canadian Dollar (AUD/CAD) Exchange Rate Review

The Aussie dollar was forced lower versus the Canadian loonie (AUD/CAD) on Friday following surprisingly upbeat Canadian labour market data. Although the Canadian unemployment rate increased marginally from 6.8% to 6.9% in line with forecasts, the Canadian full-time employment change number came in at 81.3 and the net change in employment stat came in at a massive 53.7k, instead of contracting by -2.5k as forecast.

 

Disclaimer: This economic update is provided by FC Exchange a Global Reach Group Company, industry leaders in foreign exchange. Authorised affiliates are permitted to reuse content.

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