Home Forex Market News Aussie rebounds on employment data, Kiwi slumps on RBNZ

Aussie rebounds on employment data, Kiwi slumps on RBNZ

The Australian dollar bounced back from a 6-month low, after nearly testing the 91 cent level against the US dollar.  It rose back to 0.9175 on news that the Australian economy created a record number of jobs during August – 121 thousand to be exact.  Although the vast majority of these jobs involved part-time employment (107 thousand), the development helped to bring the unemployment rate back down to 6.1% from 6.4% the previous month.  The participation rate also increased to 65.2% from 64.8%, in what constituted very encouraging news for the economy.  This news will probably prevent the RBA from entertaining any thoughts about loosening monetary policy.

On the other hand, the New Zealand dollar dropped to a fresh 7-month low against the US dollar after the Reserve Bank of New Zealand Governor made dovish remarks following the bank’s meeting.  The kiwi dropped below 82 cents after the bank said it was taking a pause from its rate-rising campaign.  The bank lowered its outlook for future interest rates, which is seen as a sign it will not raise rates as much as previously thought and said that even after the steep drop from its July high (a near 30-year high), the currency remained “unjustifiably” strong given the weakness of the prices of the country’s main exports.  Dairy prices have fallen in excess of 40% since February but other fundamentals of the New Zealand economy remained strong.

There was some respite in the selling of the UK pound, as a new poll predicted a narrow lead of the ‘No’ camp in next week’s Scotland independence referendum.  The pound reclaimed the 1.62 level against the dollar as ‘No’ led ‘Yes’ by a 6-point margin (53-47) when undecided voters are excluded in the Survation poll.

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