By Ashley Smith – The AUD strengthened to 92.31 U.S cents versus the Dollar following the release of the U.S Employment Data. The report showed that The U.S. unexpectedly lost 85,000 jobs in December. The unexpectedly negative result dampened investors’ expectations of near term interest increases in the U.S as the result showed that the U.S economic recovery is still quite shaky. While the AUD lost some of its gains to currently trade at 91.98 cents versus the USD, it is still up for the day. While U.S and European economic recovery remains unsteady, Australia seems to be skating through the recession quite well, and presenting consistently positive economic data despite the increase in interest rate and the pullback in the economic stimulus funds.
Retail sales jumped 1.4% in November as households’ consumption surged. The growth was sustained by the recent surge in employment as the jobless rate fell to 5.7% in November from 5.8% in October. Consumer spending, which accounts for more than half of the Australian economy is strengthening despite the 3 consecutive interest rate increases by the central bank. This consistent growth in consumer spending is boosting speculations for further interest rate increases, lending support for the AUD against the USD as well as other higher yielding currencies such as the EUR and GBP whose economic recovery is less consistent.
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