Strong Australian Employment Report Lifts Aussie

Strong Australian Employment Report Lifts Aussie

The Australian dollar rallied against other major currencies in the Asian session on Thursday after a key employment report showed that the country hired more jobs than expected in September.

The Australian economy added 14,500 jobs in September - blowing past forecasts for an increase of 5,000 jobs after shedding 8,800 jobs in the previous month, the Australian Bureau of Statistics said.

Meanwhile, Australia's unemployment rate came in at a seasonally adjusted 5.4 percent in September compared to 5.1 percent in August. Economists had expected a more modest increase in the jobless rate to 5.3 percent.

The participation rate was 65.2 percent, topping expectations for 65.0 percent.

A separate survey by the Melbourne Institute Survey of Consumer Inflationary Expectations showed that inflation expectations among Australian consumers increased slightly to 2.6 percent in October.

Nonetheless, the median expected inflation rate remains within the central bank's target band of 2-3 percent

The aussie had come under selling pressure last week due to a wider than expected trade deficit, the RBA rate cut and weak Chinese data.

The aussie climbed to near a 2-week high of 1.2580 against the NZ dollar and a 1-week high of 1.0095 against loonie, compared to yesterday's close of 1.2541 and 1.0050, respectively. If the aussie rises further, it is likely to break the 1.265 level against the kiwi and 1.015 against the loonie.

Food prices in New Zealand were down 0.9 percent month-over-month in September, Statistics New Zealand said - matching forecasts. This follows a 0.1 percent increase in August.

On a yearly basis, food prices were down 0.3 percent after shedding 0.5 percent in the previous month.

Against the euro, the aussie firmed to a 9-day high of 1.2514. The next resistance level for the aussie is seen at 1.245. At Wednesday's close, the pair traded at 1.2586.

The aussie appreciated 0.5 percent against the U.S. dollar and approached a 9-day high of 1.0289, compared to yesterday's close of 1.0235. The aussie is likely to test the next resistance level at 1.03.

Erasing early losses, the aussie edged up to 80.32 against the yen, up from yesterday's close of 80.04. The next upside target level for the aussie-yen pair is seen at 81.00.

The members of the Bank of Japan's monetary policy board felt that economic conditions warranted the increase of the central bank's asset purchase plan, minutes from the board's September 18-19 policy meeting revealed today.

In addition, the board members noted that price trends may be weakening and inflation is expected to rise slowly.

At the meeting, the BoJ announced a fresh round of stimulus to revive the economy by expanding the asset purchase by another JPY 10 trillion. The total size of the program was lifted to JPY 80 trillion following an additional JPY 5 trillion purchase authorization each for Japanese government bonds and treasury discount bills.

Data released by the Cabinet Office showed that confidence among Japanese households deteriorated slightly in September, after improving in the previous month.

The seasonally adjusted consumer confidence index, excluding one-person households, decreased to 40.1 in September from 40.5 in August, which was higher than July's reading of 39.7.

Looking ahead, the ECB monthly report is due in the European session.

U.S. weekly jobless claims for the week ended October 6th, trade data for August and import price index for September and Canadian trade data and new housing price index for August are likely to influence trading in the New York session.