Australian dollar up on new government

Financial and commodity markets analytics

The Australian dollar is trading slightly lower today, giving up some of the gains it made of Friday after unemployment numbers from the US as well as confirmation that a government will be formed.

At 8.56am (GMT) the Aussie dollar was trading at US75.39c down from US75.73c at close of trade on Friday.

Although the Non-Farm payrolls figure came in comfortably above analysts’ expectations, the unemployment rate creeped higher and average hourly earnings rose just 0.1 percent.

 “The US non-farm payrolls headline rise of 287,000 comfortably exceeded expectations but wasn’t backed up by the subsidiary details in the report with the unemployment rate higher, small net downward revision to the prior two months payrolls and hourly earnings up just 0.1%” noted Ray Attrill, global co-head of FX strategy at the National Australia Bank.

The data led many to believe that the US Federal reserve will delay raising interest rates for the next few months and may not even make a move at all this year and will continue to monitor the data.

“The data was seen as validating a continued wait-and-see approach from the Fed, with no US primary dealer surveyed after the data believing the Fed will move before December even if the prospects for a September move are now less negligible than prior to the payrolls report.” Mr Attrill added.

The current government in Australia lead by Malcolm Turnbull also claimed victory over the weekend and are now expected to form a new government with a slim majority.


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