Aussie Dollar Holds Up after a Positive Jobs Data

The employment data was released on the 19th of May in Australia. The effects of this data have so far been on the side of the AUD as it reportedly holds to a steady trajectory. However, experts remain still skeptical about the currency’s ability to rally against the USD in the long term.

According to the data released, the unemployment rate in Australia fell to 3.9% as expected. It is 0.1% lower compared to the previously recorded 4.0%. It is furthermore the lowest Australian unemployment rate recorded since 1970.

On the other hand, the change in the monthly employment did not go as the forecasts suggested. Against a change of more than 30k, the data showed only a change of 4k. Although there has not been much development in creating new job opportunities, full-time employment within the country increased by a staggering 92k. Part-time employment has come down by 88k last month.

However, the Aussie dollar was pushed to the bottom again after the steady momentum it posted on Tuesday. The tightening of global monetary policies has affected the currency’s trajectory as the market seems more concerned about the policy changes. The move was caused by a surge in the risk-off trading against the AID in the market.

However, the new employment data could give Aussies a much-needed opening to carry on its interest rate hikes and to get a hold of the listening policies through an accelerating lifting cycle. New traders should research the best Forex brokers in Australia if they plan to take advantage of this opportunity.

Despite having great domestic numbers, the experts are not sure how it may pan out for the Aussies on the global scene. The employment data numbers are likely to be sidelined in the current conditions of the market.

As of now, the market seems to be engrossed in the growth vs inflation narrative of the currencies. It is believed that the central banks have unintentionally pushed inflation over the years in the name of enabling growth. The tendency dates back to the economic depression during the 70s and 80s.

Paul Volker, the Chairman of the US Federal Reserve at that time, introduced interest rate hikes as a way to control inflation. However, this move resulted in a couple of extreme recessions during the 80s. As the market seems to have had a revelation regarding this, many businesses that require cheap investments are facing a hard time getting money. You can explore forex broker USA platforms and choose as per need.

Reportedly, the current conditions in the market may not be favorable for growth-based currencies like the AUD. It would also mean that currencies like the USD, JPY, and CHF may experience increased inflows as they belong to the “safe-haven group.” As of now, the USD index seems to be pushing the AUD/USD pair forward in the market.

Roxanne Williams

Roxanne Williams has recently joined as a market reporter for CryptoNewsZ - the 24/7 crypto news site, where she produces recent stories, technical analysis and price updates on world's leading cryptocurrencies.

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