Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Aussie plunges after February jobs report
The Australian dollar was sharply lower yesterday after the February employment report missed expectations.
The Australian employment market saw a loss of 52.8k jobs, a massive variance from the 30k growth expected, while the unemployment rate held steady at 4.1%.
The Aussie tumbled on the news, again rejecting the major resistance level at 0.6400, with the AUD/USD falling 0.9% for the day.
The Aussie fell versus most other currencies, down almost 1.0% versus the Japanese yen, but climbed versus the New Zealand dollar.
Greenback rebounds post-Fed, moves into short-term uptrend
Overnight, US sharemarkets were down moderately as investors digested this week’s Federal Reserve decision.
The S&P 500 fell 0.2% while the tech-focused Nasdaq dropped 0.3%.
The US dollar was strongly higher as markets digested the gloomier outlook from the Fed after the central bank raised inflation forecasts and lowered growth forecasts.
The USD index extended its rebound from five-month highs and moved into a short-term uptrend – potentially signalling further gains for the greenback.
The NZD saw the largest losses versus the USD overnight with the NZD/USD down 1.1%.
In Asia, the USD/SGD gained 0.3% while USD/CNH also gained 0.3% with both markets climbing from key support at the four-month lows.
British pound higher after BoE
In Europe, the focus was on last night’s Bank of England decision to keep interest rates on hold at 4.50%.
However, the voting pattern split – at 8-1 versus the 7-2 expected – means that markets believe the BoE is now less likely to cut and has supported the GBP.
The British pound continues to outperform since the GBP/USD formed a bottom in mid-January.
The AUD/GBP hit a new five-year low overnight, NZD/GBP is nearing a ten-year lows while GBP/SGD reached a nine-month high.
Aussie hit hard post jobs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 17 – 22 March
All times AEDT
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.