The Australian Dollar Rallies Sharply On Strong November Jobs Report

(This is an excerpt from an article I originally published on Seeking Alpha on November 11, 2015. Click here to read the entire piece.)

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Statistics Australia reported a large jump in jobs for the month of October, 2015. The seasonally adjusted unemployment rate dropped from 6.2% to 5.9%. This is the lowest unemployment rate since May, 2015 when the rate also dropped from 6.2% to 5.9%. The number of employed increased by 58,600 which includes 40,000 full-time positions. On a trend basis, the unemployment rate has stayed 6.1% since March, 2015.

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This 15-minute chart makes clear the immediate impact of the Australian jobs report for October
This 15-minute chart makes clear the immediate impact of the Australian jobs report for October

At the time of writing, the Australian dollar has traded back to its 50-day moving average (DMA) against the U.S. dollar. Added technical resistance should come from a now declining 20DMA.
At the time of writing, the Australian dollar has traded back to its 50-day moving average (DMA) against the U.S. dollar. Added technical resistance should come from a now declining 20DMA.

Source for charts: FreeStockCharts.com

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The market no longer expects the RBA to cut rates in December. Odds have fallen dramatically over the last month.
The market no longer expects the RBA to cut rates in December. Odds have fallen dramatically over the last month.

Source: ASX RBA Rate Indicator

I do not think this report changes anything for the RBA. During its November decision on monetary policy, the RBA noted that declining inflation gives it scope for considering more accommodative policy. {snip}

Be careful out there!

Full disclosure: short the Australian dollar

(This is an excerpt from an article I originally published on Seeking Alpha on November 11, 2015. Click here to read the entire piece.)

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