Australian labour market also surprises positively – Commerzbank

This morning, the Australian employment report joined the ranks of countries that have recently reported surprisingly strong figures, Commerzbank’s FX analyst Michael Pfister notes.

AUD can remain well supported for the time being

“At 64.1k, job creation was slightly stronger than August's strong figure (and driven mainly by full-time positions), while the unemployment rate was revised slightly lower. At 4.1%, the unemployment rate remains close to historic lows and well below the average for the past decade. As a result, the Australian dollar has strengthened considerably this morning.”

“Of course, the Reserve Bank of Australia's future actions will also depend on the third quarter inflation figures, which will be released in two weeks' time. However, with the labour market looking much stronger again and the trend having been strengthening for several months now, there may be little reason to initiate a turnaround on interest rates in early November.”

“Such figures also suggest that the RBA will take its time until early next year. The Aussie should therefore remain well supported for the time being, although the Chinese figures are also likely to be the key factor in Australia. If they are weaker, the Australian dollar is likely to struggle as well.”