13 Feb 2014
Flash: AUD apt to dismiss positive news - RBS
FXStreet (Bali) - Greg Gibbs, FX Strategist at RBS, stresses the severity of the Aussie decline following the poor jobs report in Australia, adding that the currency is apt to dismiss positive news going forward.
Key Quotes
"Australian jobs fell 4K in Jan, weaker than +15K expected, and the unemployment rate rose from 5.8% to 6.0%, above 5.9% expected. There were minor revisions to the Dec results that were weak at -23K. "
"This is consistent with the weakening trend in employment with the 3 and 6 month moving average of jobs growth at -3 and -4K. Unemployment at 6.0% is a high since 2003, rising above the previous peak of 5.9% in 2009, and provides a bit of extra sticker shock, although the RBA has been forecasting a further rise in unemployment in the current year. "
"Employment is of course a lagging indicator, and the broad sweep of data in Australia has improved in recent months. Although the RBA has been forecasting growth of "at best" trend in 2014 and it may take some time for the economy to feel stable, especially if the AUD was to move much above 90 on a sustained basis."
"The AUD reaction to this data is quite severe (does the market not recall the booming Chinese imports data released on Wednesday). The AUD continues to trade as if the market is very sceptical on the outlook for the Chinese economy and apt to dismiss positive news."
Key Quotes
"Australian jobs fell 4K in Jan, weaker than +15K expected, and the unemployment rate rose from 5.8% to 6.0%, above 5.9% expected. There were minor revisions to the Dec results that were weak at -23K. "
"This is consistent with the weakening trend in employment with the 3 and 6 month moving average of jobs growth at -3 and -4K. Unemployment at 6.0% is a high since 2003, rising above the previous peak of 5.9% in 2009, and provides a bit of extra sticker shock, although the RBA has been forecasting a further rise in unemployment in the current year. "
"Employment is of course a lagging indicator, and the broad sweep of data in Australia has improved in recent months. Although the RBA has been forecasting growth of "at best" trend in 2014 and it may take some time for the economy to feel stable, especially if the AUD was to move much above 90 on a sustained basis."
"The AUD reaction to this data is quite severe (does the market not recall the booming Chinese imports data released on Wednesday). The AUD continues to trade as if the market is very sceptical on the outlook for the Chinese economy and apt to dismiss positive news."