The Australian dollar is on the charge as markets pare RBA rate cut bets

Ronesh Parbhoo/ Barcroft Images/ Barcroft
  • The Australian dollar is rallying following the release of Australia’s jobs report for February.
  • Australian unemployment fell to the lowest level since June 2011 last month.

The Australian dollar is on the charge in Asia following the release of Australia’s jobs report for February.

While employment growth slowed to 4,600 during the month, a decline in labour force participation saw Australia’s unemployment rate dip to 4.9%, leaving it at the lowest level since June 2011.

Markets had been expecting it to remain steady at 5%, with the risk of an increase to 5.1%.

The shock decline has seen expectations for RBA rate cuts this year scaled back a touch, helping to lift Australian government bond yields as well as the Aussie dollar.

Previously, the RBA has said that a sustained increase in the unemployment rate was one scenario that could warrant a further reduction in the cash rate. With unemployment continuing to edge lower, the February jobs report has not provided the smoking gun that markets were looking for to justify further policy easing.

The AUD/USD currently trades at .7162, the highest level since February 27.

Investing.comAUD/USD 4-Hour Chart

The AUD/USD was already moving higher before the jobs report was released, helped by news that an increase in interest rates from the US Federal Reserve is unlikely to occur this year.

As seen in the scoreboard below, the Aussie was also performing well against the cross rates on Thursday, recording strong gains except the New Zealand dollar.

AUD/USD 0.7162 , 0.0047 , 0.66%
AUD/JPY 79.23 , 0.48 , 0.61%
AUD/CNH 4.7834 , 0.0263 , 0.55%
AUD/EUR 0.6264 , 0.0032 , 0.51%
AUD/GBP 0.5414 , 0.0023 , 0.43%
AUD/NZD 1.0332 , -0.0004 , -0.04%

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