AUD/ USD – Jumps as Australian Employment Numbers Sparkle

AUD/USD  jumped higher in Thursday trading, as Australian and US employment data was positive. In Australia, Employment Change was the best in years, while US Unemployment Claims fell nicely and easily beat the estimate. Australian MI Inflation Expectations showed little change, and in the US inflation figures and Current Account matched the forecast. AUD/USD pushed above the 1.03 line in the Asian session, and was trading in the mid-1.03 range in European trading.

The Australian dollar took full advantage of strong Australian employment data, gaining close to a cent after the release of Employment Change. The indicator posted a sizzling gain of 71.5 thousand new jobs, blowing past the estimate of 9.5 thousand. This was an astounding reading, the highest since 2000. The Unemployment Rate dipped lower to 5.4%, beating the forecast of 5.5%. MI Inflation Expectations climbed 2.3%, little changed from last month’s rise of 2.2%. In the US, Unemployment Claims continue to fall, with 332 thousand new claims last week. The estimate stood at 348 thousand. This is the third straight week that US Unemployment Claims have easily beaten the estimate. In other US releases, PPI, a key indicator, came in at 0.7%, as expected. Core CPI also matched the estimate, rising 0.2%. Current Account, which is released every quarter, posted as deficit of $110 billion, just under the estimate of $111 billion. This is the third straight week that Unemployment Claims have easily beaten the estimate.

In Japan, the markets are bracing for the Bank of Japan to implement further monetary easing measures, as the yen continues to struggle. These sentiments were reinforced following tough comments from the incoming BOJ head. During confirmation hearings, Haruhiko Kuroda declared that he would do “whatever it takes” to beat deflation and reach the government’s inflation target of 2.0%. The incoming governor reiterated that he is confident that an effective monetary policy could defeat deflation, which continues to weigh heavily on the Japanese economy. Kuroda noted that the current amount of asset buying by the BOJ will not achieve the 2.0% inflation goal. There are media reports that Kuroda may start implementing additional easing immediately upon assuming office next week, rather than wait until the BOJ’s next policy meeting in April. There were no surprises as the BOJ released the minutes of its February meeting, at which the central bank maintained its monetary policy. Some members stated they were in favor of buying Japanese Government Bonds with longer remaining maturities if additional monetary easing is needed in the future.

AUD/USD for Thursday, March 14, 2013

AUD/USD March 14 at 13:00 GMT

1.0359 H: 1.0382  L: 1.0297

AUD/USD Technical

AUD/USD has enjoyed a nice run in Thursday trading, as the pair climbed as high as 1.0382 before retracting slightly. The pair is facing resistance at 1.0424. This line has remained intact since early February. This is followed by resistance at 1.0568. On the downside, there is support at 1.0334. This is a weak line, and could face more activity if the Aussie loses any ground after today’s impressive gains. The next support level is at 1.0230. 

• Current range: 1.0334 to 1.0424

Further levels in both directions:

• Below: 1.0334, 1.0230, 1.0174, 1.0080 and 1.00
• Above: 1.0424, 1.0568, 1.0605 and 1.0697

OANDA’s Open Position Ratios

The AUD/USD ratio is pointing to movement towards short positions. Given the Australian dollar’s rally in Thursday trading, this could signify an expectation for a correction in the pair’s upward trend. Will we see the US dollar recover some today’s losses?

The Australian dollar got some great news on Thursday as Australian employment data was outstanding. With the US continuing to post solid data, we could see investors become more comfortable purchasing Australian assets, which would give the Aussie a lift.

AUD/USD Fundamentals

• 00:00 Australian MI Inflation Expectations. Actual 2.3%
• 00:30 Australian Employment Change. Estimate 9.5K. Actual 71.5K
• 00:30 Australian Employment Rate. Estimate 5.5%. Actual 5.4%
• 7:00 AustraliRBA Assistant Governor Christopher Kent Speaks in Sydney
• 12:30 US PPI. Estimate 0.7%. Actual 0.7%
• 12:30 US Unemployment Claims. Estimate 348K. Actual 332K
• 12:30 US Core PPI. Estimate 0.2%. Actual 0.2%
• 12:30 US Current Account. Estimate -111B. Actual -110B
• 13:00 FOMC Member Sarah Bloom Raskin Speaks
• 14:30 US Natural Gas Storage. Estimate -136B
• 17:00 US 30-year Bond Auction
• 21:30 US Bank Stress Test Results

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.