Forex News
December 6, 2012 @ 10:06 am

Aussie dollar strengthens after Australian jobless rate surprises

Unemployment in Australia fell in November, giving signs that the labour market is improving and hiring is picking up. According to data from the Australian Bureau of Statistics, the unemployment rate fell more than estimated in November to 5.2 percent from 5.4 percent in October.

The jobless rate was a pleasant surprise since there were expectations for an actual increase in unemployment to 5.5 percent. Meanwhile, the number of new jobs created also rose to 13,900 from a previous 10,200, also beating expectations of a mere 200 additional jobs.

The news sent the Australian dollar up 0.3 percent against the US dollar in early Asian session trading today.  AUDUSD hit a session high of $1.0479.

Also helping buoy the aussie is rising expectations that the Reserve Bank of Australia (RBA) will be less likely to cut rates further. Earlier this week, the RBA cut the main cash rate by 25 basis points to a record low 3.00 percent. The central bank said lower rates were needed to offset some of the effects of an “uncomfortably high” Australian dollar.

The Australian dollar rose a third of a US cent after the data as the news eased concerns that unemployment was bound to increase in coming months amid a slowing economy.

The news was encouraging and slightly reduced the urgency for further cuts in interest rates after the Reserve Bank of Australia (RBA) cut a quarter point this week, taking the cash rate back to the record lows of 3 percent touched during the global financial crisis.

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