Thursday saw a rally on the AUDUSD following healthy employment reports from Australia.
The rally of 160 pips from yesterday’s low of 0.8066, saw trading at 0.8230 on AUDUSD. The reason was better than expected employment data.
Employment Change for December recorded 37.4K, bringing job creation well above the forecast of 3.8K, even though it was a slight drop on November’s figure of 44.9K
Unemployment Rate for December was at 6.1%, down from forecast of 6.3% and previous month’s 6.2%
The result saw confidence in the Aussie against the US dollar. Some analysts say this is enough to steady the interest rate and deter cuts in the first quarter. However, as reported in Yahoo Finance, the Australia and New Zealand Bank ANZ chief economist Warren Hogan is still predicting that the rate will decrease; "Weaker growth and lower inflation in 2015 will provide the RBA with a reason and the scope to take the cash rate down 50bp to 2.00 per cent over the first half of the year.”
The report noted Mr Hogan’s response after the employment data, ‘Reserve Bank will cut its cash rate twice in the first six months of 2015, even after a surprise drop in the jobless rate,’ but added that ‘If the unemployment rate remains below 6.3 per cent in January, the RBA may delay its first rate cut.’
Meanwhile, AUDNZD bounced parallel to the AUDUSD, taking it from its near 20 year low just one week ago with the pair up from 1.0533 to 1.0635.
MT4 chart: AUDUSD
MT4 chart: AUDNZD
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