AUD: Stronger Employment Report Offsets Credit Rating Warning - MUFG
Lee Hardman, Currency Analyst at MUFG, suggests that the Australian
dollar continues to derive support so far this year primarily from the
easing of economic growth concerns in China and dampened Fed rate hike
expectations.
Key Quotes
“Further
evidence that the Australian labour market continues to improve has
provided support for the Aussie overnight as well. The latest report
revealed that the unemployment rate continued to decline to 5.7%
extending its decline to 0.5 percentage point over the last year.
Employment growth continues to remain solid expanding at an annual rate
of 2.0%. The report supports expectations that the RBA will keep policy
unchanged this year.
The positive developments have helped to
offset the credit rating warning from Moody’s overnight ahead of the 3rd
May federal budget. Moody’s stated that without revenue-raising
measures, limited spending cuts are unlikely to meaningfully advance the
government’s aim of balancing the budget and debt is likely to continue
to climb which would be credit negative. The negative impact of the
announcement on the Aussie is likely to prove only fleeting.”
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