The Aussie Dollar had a good day on Wednesday, getting back on to a US 76 cents big figure for the first time in just over a week even before the FOMC Statement. This was partly because the Westfield takeover has prompted thoughts of some ‘pre-hedging’ of the foreign exchange transactions associated with the deal and partly because traders didn’t want to be caught short of AUD ahead of today’s Australian labour market report.
Those who closed out short positions were right to do so. Consensus estimates were for a 19,000 increase in employment with the jobless rate steady at 5.4%. According to the Australian Bureau of Statistics (ABS), employment actually jumped by 61,600 to 12.4 million in November. It was the largest monthly increase since October 2015, whilst the previous month’s figure of +3,700, was also revised up to show a gain of 7,800.
The figures are arguably not quite as good as they look. Every month the sample of the population in the survey is rotated and it appears the incoming group may have had higher levels of employment than those who left the survey. Nevertheless, the rest of the report was very strong indeed. Full-time employment jumped by 41,900 to 8.5 million, beating a 19,700 increase in part-time employment which rose to 3.9 million. Over the last 12 months, full-time employment has increased by 304,600, far outpacing a 78,700 increase in part-time employment. Combined, total employment increased by a huge 383,300. Reflecting the strong rise in employment, the total number of hours worked by all Australians increased by 9.8 million hours, or 0.6%, to 1.7409 billion hours.
Having reached a pre-FOMC high of 0.7612, the Aussie Dollar extended its gains in New York on Wednesday evening to a best level just above 0.7630 (the highest in 8 days). It has advanced further overnight and opens in London up around half a cent at 0.7665 with GBP/AUD at 1.7520.