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Currency Market Analysis

Oct 18, 2019 | Currency Market Analysis

Global Themes

Aussie jumps to one-month highs as unemployment falls

  • Aussie jumps 0.9%
  • Brexit deal done, but more required
  • Chinese GDP at 1.00pm AEDT

Rate cut less likely 

 The AUDUSD pushed to one-month highs yesterday after a better than expected result from the Australian employment release.

Employment growth, at 14.7k new jobs, was in line with forecasts, but the unemployment rate fell to 5.2% from 5.3% in a sign of improvement for the Australian economy.

The market expectation for a Reserve Bank of Australia rate cut in November plunged.

After the release, the market probability for an RBA cut on Melbourne Cup day fell to 20% from 35% before the job announcement (source: Reuters).

The AUDUSD gained 0.9%.

Brexit deal

Otherwise, the overnight focus was on the UK, after the British government and European Union agreed to a new deal for Brexit.

The market reaction remained cautious, however, because the deal still requires approval from the UK parliament.

The UK parliament is likely to vote over the weekend which creates the chance of broader volaitlty in Monday’s trade.

China GDP

Today’s focus is on Chinese data with September quarter economic growth figures released at 1.00pm AEDT.

Chinese data has recently weakened and today’s number will be closely scrutinised.

Industrial production, retail sales and fixed asset investment will also be released.  

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