The Australian dollar is up sharply in today’s trading as an unexpected drop in the unemployment rate as well as surprising job numbers gave a boost to the local currency.
At 8.25am (GMT) the Aussie dollar was trading at US77.38 up from US76.77c in yesterday’s trade.
The unemployment rate in Australia dropped from 6.3% to 6.1% catching most analysts by surprise as the figure has been on the rise in recent times creating a lot of uncertainty in the Australian economy.
The number of new Jobs created also came in well above expectations at 37.700 against a consensus of 15,000 with a majority of the new positions being full time employment.
The surprising data has brought into question another rate cut by the RBA which most analysts were predicting would happen at the Banks next board meeting in May.
Analysts from national Australia bank will now wait until next week for the release of March quarter inflation figures and the minutes of the RBA's last meeting before reassessing the situation on an interest rate cut.
"It feels quite difficult at this point to build the strong case for May that normally precedes RBA rate moves," NAB senior economist David de Garis said.
But some like JPMorgan Australia chief economist Stephen Walters, believe a rate cut is still on the cards by noting that the strong employment numbers are not enough to offset the weakening inflation, falling iron ore prices and a lack of consumer confidence.
Mr. Walters LSO also questioned the reliability of the survey after the Australian Bureau of Statistics made several amendments to its methodology last year
"There's less probability of the RBA cutting in May, but we're sticking with our call that the RBA needs to cut the cash rate because there are still a lot of other moving parts out there that aren't good” Mr Walters noted/
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