AUD/USD Rally Recovers after Australian Unemployment Data Disappoints17 March 2017 by FC Exchange
The markets were mixed this week – US dollar investors were given a much anticipated Federal Reserve interest rate hike, but felt disappointed by the indication that increments will be smaller and fewer than forecast. As a result, the greenback slipped by a cent versus both the euro and the pound and speculation heightened on how likely further rate hikes in 2017 actually are. The Australian dollar also fared well against the buck, with the AUD/USD exchange rate climbing by 2% to hit a three-week high of 0.77.
However, the rally felt some resistance after the release of unfavourable Australian labour market data. The Australian unemployment rate jumped from 5.7% to 5.9% in February, marking a 14-month high. The number of people employed fell by -6,400 in February instead of hitting the +16.0k forecast.
Minister for education and training Simon Birmingham commented: ‘We are acutely aware that there are too many Australians who remain unemployed, without the security and dignity of work, and that significant economic challenges lie ahead. That’s why we’re committed to creating the right policy frameworks that will facilitate stronger jobs growth, so that Australians can take advantage of new, emerging job opportunities.’
Meanwhile, the price of iron ore has been pushing higher as demand from China took a notable upswing. If the rally continues it’s likely the Australian dollar will be offered support to strengthen further.
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