The Australian Dollar rallied against the US Dollar after the US non-farm payroll disappointed the economists forecast. The expectation was for an addition of 235,000 jobs for October however the actual result was for 214,000 jobs.
The AUD gained back more than a cent from the low it experienced late last week, currently trading at 0.8646 at 8:00 AM AEST Today.
Whilst the unemployment rate for the US was an improvement from the forecast for a result of 5.8%, this with the addition of only 214,000 jobs was not considered overly favourably by investors. The employment data has been under particular attention after the most recent Federal Open Market Committee’s change in tone relating to their position on the US labour market. BK Asset Management managing director Kathy Lien explains ‘When the Fed upgraded its assessment of the labour market, they set expectations for a very strong non-farm payrolls report and unfortunately Friday’s jobs number failed to impress, sending the dollar lower against all of the major currencies.’
The Australian Dollar received a further lift after the weekend; China released its trade balance which was significantly better than expected with a trade balance surplus of 45.41 Billion. Exports were up 11.6 per cent year on year and imports increased by 4.6 per cent. Whilst a positive result for China, the recent results out of China have been varied. The Chinese economy grew at a rate of 7.3 percent for the third quarter, the slowest result they have posted for 5 years.
Today, China will continue to be in focus, with their release of Consumer Price Index (CPI), the forecast is for 1.6%. Since February, with the only exception being June, CPI data out of China has been consistently disappointing against expectations, each monthly release below the forecast.
Australia will release the monthly result of new home loans today at 10:30. This figure is considered a leading indicator in housing demand and the expectation is for a negative figure of -0.3%. Last month’s result was -0.9%.
We can expect a quiet session of trading during the offshore session tonight with no high level data scheduled to be released.