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Aussie Poised to Extend Rally

H.S. Borji
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Aussie Poised to Extend Rally

The Australian dollar soared above 94 US cents Thursday on its way to fresh 2014 highs after the labour market posted stronger than forecast gains.

The Aussie has soared nearly 6 percent year-to-date, a trend expected to continue as long as the flow of economic data remains positive. Australian employers added 18,100 jobs last month, following an upwardly revised gain of 48,200 in February, the Australian Bureau of Statistics reported today.

Part-time employment surged by 40,200, after declining sharply the previous month. Full-time employment fell by 22,100 after a revised gain of 80,000 in February that was also the biggest in more than two decades.

The unemployment rate unexpectedly declined 0.3 percentage points to 5.8 percent.

The Australian dollar reached a session high of 0.9462, before falling back to 0.9422 in North America’s afternoon session, a gain of more than 0.4 percent. The Aussie is trading at its highest level since mid-November, despite losing ground after weak Chinese export data. China — Australia’s largest trade partner — saw its exports tumble 6.6 percent annually in March, government data showed.

Underlying the Aussie’s resurgence in recent months has been a shift to a neutral policy stance from the Reserve Bank of Australia. Forex traders, relatively confident the Aussie bottomed out last year, have continued to support the commodity currency amid a spate of stronger than forecast data.

The Australian currency, riding a four day winning streak, is poised to end the week on a gain of more than 1.4 percent. A lack of compelling data Friday will shift the market’s attention to next Tuesday, when the RBA releases the minutes of its latest policy meetings.

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