Aussie Surges Up On Strong Employment Data

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Thursday morning in Asia, the Aussie made a sharp upward spike against its major counterparts as a surprisingly strong labor report fueled talks the Reserve Bank of Australia may raise interest rates in March.

The Australian Bureau of Statistics said that the number of people employed rose 52,700 in January - beating analysts' expectations for an increase of 15,000 jobs.

The report also showed that the unemployment rate in Australia once again surprised analysts, coming in at a seasonally adjusted 5.3% in January. Economists had expected the unemployment rate to climb 5.6% in January, following the 5.5% rate in December.

Today's report increased pressure on the Reserve Bank of Australia Governor Glenn Stevens to resume raising borrowing costs. The RBA unexpectedly kept the benchmark interest rate unchanged last week at 3.75 percent, saying information about the impact of three increases from October to December is still unclear.

China's January CPI released earlier today also boosted the Australian currency as China is Australia's largest trading partner and weaker inflation data damped speculation Chinese authorities would extend efforts to curb growth in Asia's second-largest economy.

China's prices rose 1.5 percent in January from a year earlier, slower than economists' expectations for a 2.1 percent increase.

Additionally, the Australian currency received a boost from a rise in most Asian stocks, as benchmark interest rates are 3.75 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations' higher-yielding assets.

Australia's benchmark S&P/ASX 200 index is currently trading at 4,553, up 39.6 points or 0.9% over its previous close. The broader All Ordinaries index is up 41 points or 0.9% at 4,574.

The Aussie, which closed yesterday's trading at 0.8755 against the US currency rose 1.5% in early Asian deals on Thursday to hit an 8-day high of 0.8894. The next upside target level for the aussie-greenback pair is seen at 0.892.

The Aussie that plunged to a 4-month low of 0.8581 on February 05 reversed its direction as the greenback declined after the U.S. Labor Department said that the non-farm payroll employment unexpectedly dropped in January. Since then, the aussie-greenback pair has gained 4%.

During early Asian deals on Thursday, the Aussie climbed to an 8-day high of 0.9421 against the Canadian dollar. On the upside, 0.961 is seen as the next target level for the Aussie. At yesterday's close, the aussie-loonie pair was quoted at 0.9301.

After hitting a 1-1/2 -month low of 0.9234 on February 05, the Aussie has advanced 2% against the Canadian currency thus far.

Against the currency of Japan, the Aussie strengthened to a 1-week high of 80.04 during early Asian deals, up 1.6% from Wednesday's close of 78.78. If the aussie-yen pair moves up further, it may target the 80.7 level.

The Aussie has appreciated 5% against the yen since it touched a 6- 1/2 -month low of 76.23 on February05.

The Australian dollar soared to a 2-week high of 1.5507 against the euro in early Asian trading. The next upside target level for the Aussie is seen at 1.542 against the euro. The euro-aussie pair was worth 1.570 at yesterday's close.

The Aussie jumped to a new multi-year high of 1.5423 against the euro on January 21. Although the aussie declined 3.4% thereafter, it rebounded again after hitting a 1-month low of 1.5958 on February4. Since then, the aussie has gained 2.8%.

The Aussie appreciated 0.7% against the NZ dollar from yesterday's New York session close of 1.2647 to reach a 15-day high of 1.2740 in early Asian deals on Thursday. If the aussie-kiwi pair strengthens further, it may likely target the 1.278 level.

The aussie slumped to a 4-week low of 1.2426 against the kiwi on February 02. But the kiwi fell sharply on February 03 on disappointing New Zealand unemployment report. Thus far, the kiwi has lost 2.5% against the aussie.

In the upcoming European session, the European Central Bank will publish its monthly report at 4:00 am ET.

Across the Atlantic, the U.S. advance retail sales for January, weekly jobless claims for the week ended February 06, business inventories for December and the Canadian new housing price index for December have been scheduled for release.

Thursday morning in Asia, the Aussie made a sharp upward spike against its major counterparts as a surprisingly strong labor report fueled talks the Reserve Bank of Australia may raise interest rates in March. (Market News Provided by RTTNews)