Powered by: Motilal Oswal
17-10-2024 08:51 AM | Source: Reuters
Aussie jumps on jobs surprise, dollar holds steady

Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel

The Australian dollar charged higher on Thursday after employment numbers beat forecasts for a sixth month, while the dollar held near an 11-week high as it drew additional support from a potential Trump win at the upcoming U.S. election.

The highlight of the Asia day was on a press conference in China which kicked off at 0200 GMT, focused on measures to prop up the country's beleaguered property sector.

The onshore yuan was steady at 7.1179 per dollar as officials were speaking, while its offshore counterpart was last 0.14% higher at 7.1261 per dollar.

The Australian dollar, often used as a liquid proxy for the Chinese yuan, gained 0.66% to $0.6710, as the upbeat jobs report at home overshadowed the ongoing news from China.

Data on Thursday showed net employment in Australia surged 64,100 in September from August, well above market expectations for a 25,000 rise, while the jobless rate held steady.

That led traders to pare back bets of a first interest rate cut from the Reserve Bank of Australia (RBA) in December.

"Today's data release will only reinforce the RBA's view that labour market conditions are still tight relative to full employment," said Abhijit Surya, Australia and New Zealand economist at Capital Economics.

"With the labour market running red hot, the (RBA) won't cut rates before the first half of next year."

In the broader market, the dollar was on the front foot, after having scaled an 11-week top against a basket of peers in the previous session.

Sterling traded 0.03% higher at $1.2995, but languished near a two-month low hit on Wednesday due to weaker-than-expected UK inflation data. The yen struggled near the 150 per dollar level and was last at 149.36.

The euro was little changed at $1.0864, ahead of a monetary policy decision from the European Central Bank later on Thursday where it is expected to deliver another rate cut.

The dollar has not only drawn support from a run of upbeat data on the U.S. economy which has in turn caused traders to scale back their expectations of Fed rate cuts, but also on the possibility of a victory by Republican presidential candidate Donald Trump at next month's election.

"His core policies on tariffs, immigration, and taxes would produce a more inflationary outlook in the U.S., diminishing prospects for aggressive Fed rate cuts over the cycle," said Thierry Wizman, global FX and rates strategist at Macquarie.

The dollar index was last steady at 103.47, having peaked at 103.60 in the previous session.

Elsewhere, the New Zealand dollar ticked up 0.28% to $0.6074.

It was nursing some losses after hitting a two-month low on Wednesday as data showed domestic inflation returned to the Reserve Bank of New Zealand's target range of 1% to 3% in the third quarter, keeping the door open for the central bank to continue aggressively cutting rates.