Although the Australian Dollar pared some of its overnight gains in response to disappointing Chinese trade data, the Euro to AUD pairing largely held declines as European trading began.
The Euro fell against a bolstered ‘Aussie’ as data showed a surprisingly strong improvement in Australia’s unemployment rate.
Economists had expected Australia’s jobless rate to come in at 6.1 per cent in March, unchanged from February’s negatively revised figure.
However, the unemployment rate actually declined to 5.8 per cent as part-time employment increased by 40,200 last month.
The fall was the most significant for nearly four years and adds to the case for the Reserve Bank of Australia increasing interest rates in the near future.
Full time employment dropped by 22,100 and the participation rate eased from a positively revised 64.9 per cent to 64.7 per cent.
The comparatively upbeat result inspired this response from chief economist Kieran Davies; ‘The economy’s outlook has improved and we’re getting a lift in hiring. The possibility of an early turning in the labour market is one reason why the RBA may hike rates this year.’
After the data was published the Australian Dollar surged against several of its most traded currency counterparts, hitting a four and a half month high against the ‘Greenback’ and rallying against the Euro.
However, the ‘Aussie’ went on to pare its advance as China’s trade data fell short of expectations.
As China is Australia’s largest trading partner, the economic slowdown in the Asian nation is a major concern.
The trade report showed that Chinese exports slipped by 6.6 per cent in March while imports dropped by 11.3 per cent.
Economists had expected a 4.8 per cent gain in exports and a 3.9 per cent increase in imports.
The actual figures left China with a trade surplus of 7.7 billion US Dollars.
But while the report shook the ‘Aussie’ in the immediate aftermath of its publication, declines were modest and short-lived.
It seems that nothing can hamper the Australian Dollar’s upward momentum at the moment and the South Pacific asset closed the local session in a stronger position against the Pound, US Dollar and Euro.
Meanwhile the Euro experienced modest movement as data showed a stronger than expected decline in French industrial production.
Industrial output dropped by 0.8 per cent in February year-on-year rather than falling the 0.3 per cent expected.
On the month, industrial production increased by 0.1 per cent following a negatively revised decline of 0.3 per cent in January. Economists had envisaged a 0.2 per cent gain.
French inflation figures were also a concern, with the nation’s consumer price index advancing by just 0.4 per cent on the month in March and 0.6 per cent on the year.
With two prominent ECB officials due to speak in Washington later today, additional EUR/AUD movement may occur. Economists will also be looking ahead to tomorrow’s Chinese inflation figures.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.3856,
Euro,,British Pound,0.8260,
Euro,,Australian Dollar,1.4684,
Euro,,New Zealand Dollar,1.5854,
Euro,,Canadian Dollar,1.5095,
[/table]
