Something Positive – Good GDP, Job Numbers and A Rate Cut Here & In China
Much better than expected employment figures combined with Wednesday’s GDP result to paint a much rosier picture of our local economy yesterday and the Australian dollar rallied accordingly. Following the release by the Australian Bureau of Statistics showing an additional 38,900 jobs were added to the economy during May, the Aussie jumped from pre-announcement levels of 0.9890 to 0.9960 almost immediately. A move later in the day from the Chinese to cut local interest rates gave rise to another rally in the Aussie and here resulted the unit’s best test of parity since we moved below on May 15. Ultimately unsuccessful, this week’s 3.7% gain has proven potentially too rapid and this morning we trade near a full cent lower at 0.9895. Local trade balance figures today present themselves as a potential mover in the Asian session ahead of the US trade balance for May, as well as Chinese inflation data this weekend.