Is the Aussie dollar going to knock again at parity’s door?
The Australian dollar got a boost Wednesday from strong Australian jobs data which was “a genuine surprise to all,” says Westpac Strategist Imre Speizer. The number was “positive all around,” Speizer added, and suggests Australia’s recent weak 3Q GDP figure will likely be corrected.
While most strategists still aren’t expecting movement until sometime next year, the data put increased pressure on the Reserve Bank of Australia to raise rates – a move that generally leads to a stronger currency.
That could give the Aussie dollar a lift against its U.S. counterpart. The Australian currency surged above the U.S. dollar but has given up some of those gains in recent weeks amid broader global economic concerns. The Aussie dollar was 0.9863 Wednesday versus 0.9790 before the data.
Of course, whether Australia’s truly on a path to greater-than-expected growth is open to question. Undeniably strong Australia November jobs report is likely to be the last robust number for some time, says UBS chief economist Scott Haslem. “At 3.7% year-on-year, the pace of jobs growth is far in excess of the pace implied by the NAB, ANZ or other forward looking indicators of the labor market. So this is likely the peak (or last hurrah) for such strong jobs prints.”
He notes the unemployment rate is little changed in seven months despite the strong job additions, with hours worked slowing.
Australia’s S&P/ASX 200 index was up 0.7% midday.
–Rebecca Howard and Geoffrey Rogow
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