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During early Asian deals on Thursday, the Australian dollar soared against other major currencies lifted by Australia's stronger than expected jobs report for November. The report showed that employers added more than six times the number of jobs forecast by economists in the past month.
The aussie rose to a new multi-week high against the euro, 2-day high against the yen and a 3-day high against the greenback and the loonie.
The Australian Bureau of Statistics said that the unemployment rate in Australia declined in November to 5.7 percent from the October level of 5.8 percent. The bureau also reported that the number of employed Australians rose by 31,200.
Most economists were predicting the unemployment rate to rise to 5.9 percent, with the number of employed forecast to rise by just 5,000. The number of full time employees rose 30,800 to 7.63 million from 7.60 million in October.
The Australian labour market has remained relatively resilient in the face of uncertainties in global economic growth. The jobless rate in Australia is well below levels in Europe and the US, where the unemployment rate is 10 per cent.
Because of the strength in the employment market, the financial markets increased bets on the likelihood of the RBA lifting the overnight cash rate for a fourth consecutive time on February 2. In contrast to the ultra-low level interest rates in Japan and U.S., the RBA lifted the cash rate by 25 basis points to 3.75 per cent on December 1, following similar moves in October and November.
The Australian dollar has been one of the best performing currencies this year, having risen nearly 33 percent against the US dollar. It has risen from a low of 0.6289 in March to around $0.9408 last month as risk appetite increased.
Since Australia is a major exporter of commodities, improved prospects for growth in the global economy has benefited Australia. The RBA was the first amongst the Group of 20 to start raising interest rates when it hiked the cash rate in October.
A survey by the Melbourne Institute showed today that Australian consumers' expectations of inflation increased 0.4 percent in December to 3.6 percent.
The survey showed only 17.7 percent of those surveyed expect the inflation rate to fall within the Reserve Bank of Australia's target range of two to three percent. That compares to 18.7 percent in November.
In early Asian deals on Thursday, the Australian dollar rose to a more than 3-week high of 1.6082 against the euro compared to Wednesday's closing value of 1.6213. The next upside target for the Aussie is seen around the 1.597 level.
In the European session, the French October industrial production, Italian final third quarter GDP and industrial production reports for October are expected.
The Australian dollar jumped to a 3-day high against the Canadian dollar during Thursday's early trading. At about 8:25 pm ET, the Aussie-loonie pair hit as high as 0.9674, compared to something is missing here hit late Wednesday in New York. On the upside, the Aussie may likely find resistance near the 0.979 level.
The Australian dollar also climbed to multi-day highs against the currencies of the U.S. and Japan during Thursday's early deals. The Aussie hit highs of 0.9173 against the dollar and 81.04 against the Japanese unit compared to Wednesday's closing values of 0.9088 and 79.86, respectively. If the aussie strengthens further, the Aussie-dollar pair may likely target the 0.929 level and the Aussie-yen pair may target the 82.8 level.
Japan's cabinet Office said today that core machinery orders were down 4.5 percent month-over-month in October, falling for the first time in three months. That was exactly in line with analyst expectations following the 10.5 percent increase in September.
On an annual basis, machinery orders were down 21 percent - again matching expectations after the 22 percent contraction in the previous month.
From the U.S., the trade gap data for October is due out at 8:30 am ET. Economists estimate that the trade gap widened to $36.8 billion in the month.
At the same time, the Labor Department is due to release its customary jobless claims report for the week ended December 5th. Economists estimate that claims fell slightly to 455,000 in the recent reporting week.
The Treasury Budget, a monthly account of the surplus or deficit of the federal government is due to be released at 2 pm ET. Economists estimate a deficit of $131.6 billion for November. Duke is scheduled to speak to Chicago Fed's mortgage foreclosure policy conference in Chicago at 12:45 pm ET.
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