Australian Dollar to US Dollar (AUD/USD) Exchange Rate Sees Bullish Advance on Strong Jobs Results

In a mirror image of last week’s US Dollar performance, the ‘Aussie’ has shot up against the major currencies after posting jobs change figures that are nearly four-times greater than forecast. US data and Fed speeches due during today’s London session could halt AUD/USD progress, however.

AUD/USD Exchange Rate Sees Bullish Rise as Job Data Supports RBA Optimism

The Australian Dollar has seen gains of more than 1% against many of the major currencies. This is thanks to better-than-anticipated domestic employment data, which saw unemployment unexpectedly fall and employment shoot up at a much higher rate than forecast. Employment Change rose dramatically, with 58.6k new jobs created in October. The predicted rise had been 15k. Unemployment was expected to hold steady at 6.2%, but instead fell -0.3%.

The Reserve Bank of Australia (RBA) had previously been optimistic in its outlook on the economy, despite inflation remaining sluggish at 1.5%. The likelihood of an interest rate cut had already been low, but the massive leap in job creation further defends the RBA’s economic outlook. Any chances of a December interest rate cut have been dashed by the news, falling to a mere 5%.

The AUD/USD exchange rate hit a high of 0.7154.

USD/AUD Exchange Rate Slumps: Cool US Dollar Falls Against Strong 'Aussie'

The USD/AUD exchange rate has fallen today, nearly eradicating the gains made by the ‘Greenback’ after the stellar Non-Farm Payrolls released last week. After a short period of rapid growth, USD traded narrowly with most of the major currencies as investors began to fear the effect of overvaluation on the economy. With an interest rate hike potentially on the cards in December, an overly strong US Dollar could have weakened economic performance and delayed a rate hike – unravelling the confidence caused by the positive Non-Farm Payrolls.

The US Dollar has made small gains against all the other major currencies, with growth of more than 0.5% against the Poland Zloty (PLN) and the South African Rand (ZAR) and a 1.05% rise against the Norwegian Krone (NOK).

Before the NFP the USD/AUD exchange rate was trending at 1.3957. Following today’s Australian data, the ‘Buck’ is trending at a low of 1.3977.

AUD/USD Exchange Rate Forecast: Two Days of US Data Could Halt Australian Dollar Progress.

The current progress of AUD/USD is likely to wither under a hail of US data coming in today and tomorrow. Employment data and speeches by senior Fed officials are likely to give traders a stronger indication of the direction US monetary policy will take – uncertainty over which has been the main reason behind a lacklustre US Dollar following last week’s Bullish gains. Advance Retail Sales figures and the University of Michigan Confidence Index, released on Friday, would further compound potential ‘Aussie’ losses.

The Australian Dollar could also be harmed by news of economic slowdown from China. While riding high on job data, the ‘Aussie’ is likely to be susceptible to the fallout caused by weak lending figures from Tokyo, which saw Aggregate Financing fail to reach even half of the forecast 1302.8 billion, coming in at 476.7 billion. Continued slowdown in China will have a significant impact upon the Australian Dollar.

The AUD/USD exchange rate is currently trading between 0.7058 and 0.7154, up around 1%.