AUD/USD Rises From One-Week Low as Unemployment Rate Improves
Leading commodity currency AUD is climbing higher, following the release of an optimistic employment report that revealed a greater than forecast decline in Australia’s unemployment figures through the month of April. At the time of writing, AUD/USD is trading at around 0.775.
After falling to the lowest level seen since one week, AUD/USD recovered as the unemployment rate declined to 5.5% in April – the lowest level seen since a year, beating economists’ forecast for a reading of 5.6% instead. With a situation similar to the US and the Fed, investors are now focused on whether the faster than anticipated recovery in the labor market and the Australian economy would convince the RBA to turn hawkish soon. The Aussie central bank has maintained that it would not consider a rate hike until inflation levels reach its target of 2-3%.
In addition to the promising decline in Australia’s unemployment rate, the AUD/USD currency pair also enjoys support from recent data release that showed a 2.4% rise in wages. Although the rise was below the RBA’s target of 3%, an increase in wages paints an optimistic outlook among businesses about the economy, increasing investor confidence and supporting the strengthening of the Australian dollar.
The uptrend in AUD/USD has also helped boost NZD/USD, which has risen from its one-week low touched during the previous session. The NZD also enjoys support from the release of New Zealand’s annual budget which included a hike in welfare payments by $55 per adult – the sharpest rise seen in recent times.
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