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King of the Currencies: Australian dollar outperforms after July employment numbers rise more than expected

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Category: The Australian Economy

Published on Thursday, 09 August 2012 09:41

Written by Sam Coventry

International Money Transfers at our sister site

"Markets are pricing more than a 90% chance that the RBA will lower the cash rate by 50bps by year end" - ANZ Bank.

The Australian dollar (Currency:AUD) retains its unofficial title as 'king of the currencies' following more data that indicated that the Australian economy is maintaining its much-envied strength.

The pound to Australian dollar exchange rate is 0.09 pct in the red at 1.4797.

The euro to Australian dollar exchange rate is 0.3 pct lower at 1.1819.

The Australian dollar to US dollar exchange rate is 0.09 pct higher at 1.0582.


"AUD-USD outperformed overnight after the July employment numbers rose more than expectations (+14.0k vs +10.0k consensus expectations), though the time series remains volatile and the split between full and part time workers was fairly even. The jobless rate fell to +5.2% vs +5.3% consensus," says Chris Walker at UBS.

Also commenting on today's data is ANZ Bank who still see space for a further interest rate cut at the RBA:

"Today’s data do not change our view that the RBA will sit on the sidelines for some time now to gauge the impact of previous policy easing.

"Markets are pricing more than a 90% chance that the RBA will lower the cash rate by 50bps by year end. We continue to expect the next move in interest rates to be down, with the RBA coming to the view that the economy can grow more strongly than it is without generating inflation pressures.

"The AUD rose modestly following today’s labour market data (and the Chinese July inflation data which printed in line with expectations)."