13 Feb 2014
Flash: AUD hit by poor docket - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ , notes the increased weakness around the AUD after the poor job report.
Key Quotes
"The Australian dollar has weakened sharply following the release of the weaker than expected Australian employment report for January,, with the AUD/USD rate falling back below the 0.90- level. The report revealed that employment in Australia unexpectedly declined by 3.7k in January and the unemployment rate increased by 0.2 point to 6.0% reaching its highest level since July 2003."
"The only piece of encouraging news within the report was that hours worked increased by 1.3% in January consistent with strengthening economic growth potentially pointing to stronger employment growth ahead. Still employment growth in Australia continues to prove disappointing despite the improving outlook for economic growth as evident by stronger retail sales growth and the rising housing market."
"Over the last six months the Australian economy has shed 15.6k jobs and added only 1.3k jobs over the last twelve months. The weak employment report supports our view that the RBA will not begin to raise its key policy rate until at least well into 2015, and if the labour market does not show signs of improvement it will likely encourage investor expectations of further monetary easing later in 2014. In these circumstances, we continue to believe that the scope for the Australian dollar to strengthen in the near-term on the back of the improving domestic economic outlook is only modest."
Key Quotes
"The Australian dollar has weakened sharply following the release of the weaker than expected Australian employment report for January,, with the AUD/USD rate falling back below the 0.90- level. The report revealed that employment in Australia unexpectedly declined by 3.7k in January and the unemployment rate increased by 0.2 point to 6.0% reaching its highest level since July 2003."
"The only piece of encouraging news within the report was that hours worked increased by 1.3% in January consistent with strengthening economic growth potentially pointing to stronger employment growth ahead. Still employment growth in Australia continues to prove disappointing despite the improving outlook for economic growth as evident by stronger retail sales growth and the rising housing market."
"Over the last six months the Australian economy has shed 15.6k jobs and added only 1.3k jobs over the last twelve months. The weak employment report supports our view that the RBA will not begin to raise its key policy rate until at least well into 2015, and if the labour market does not show signs of improvement it will likely encourage investor expectations of further monetary easing later in 2014. In these circumstances, we continue to believe that the scope for the Australian dollar to strengthen in the near-term on the back of the improving domestic economic outlook is only modest."