Australian dollar rises as the number of new jobs generated in August exceeds expectations.
Australian Dollar (AUD) recovered its daily losses and continued its winning streak against the US Dollar (USD) Following the release of Thursday’s labor market report. Furthermore, traders continue to evaluate the Federal Reserve’s (Fed) 50 basis point (bps) interest rate drop on Wednesday.
Australian Employment Change increased by 47.5K in August, exceeding the consensus projection of 25.0K.
Australian employment change was 47.5K in August, down from 58.2K in July but still significantly above the consensus projection of 25.0K. The unemployment rate According to figures issued by the Australian Bureau of Statistics (ABS), the rate stayed stable at 4.2% in August, in keeping with estimates and the previous month’s figure.
The Federal Reserve’s significant rate drop demonstrates its commitment to protecting the labor market and the economy from a recession.
The Federal Open Market Committee (FOMC) reduced the federal funds rate to a range of 4.75% to 5.0%, the Fed’s first rate drop in more than four years. This step demonstrates the Fed’s commitment to protecting the labor market and directing the economy away from symptoms of recession.
Federal Reserve Chair Jerome Powell stated during a press conference after the monetary policy meeting, “This decision signifies our increased confidence that, with the right adjustment to our policy approach, we can sustain a strong labor market while achieving moderate economic growth and bringing inflation down to a sustainable level.” “2% level.”
Daily Market Movers: Australian Dollar Rises Following Stronger Employment Change.
Fed policymakers upgraded their quarterly economic predictions, raising the median expectation for unemployment to 4.4% by the end of 2024, up from 4% in June. They also increased their long-term forecast for the federal funds rate from 2.8% to 2.9%.
JP Morgan CEO Jamie Dimon said on Tuesday that whether the Federal Reserve lowers interest rates by 25 or 50 basis points, the impact will be “not earth-shattering.” Dimon reiterated, “They need to do it,” but noted that such movements are rather insignificant in the broad scheme of things, as “there’s a real economy” functioning beneath the Fed’s rate increases, Bloomberg reports.
US retail sales increased by August’s month-over-month growth was 0.1%, up from a revised 1.1% increase in July, exceeding predictions of a 0.2% fall and suggesting solid consumer spending. Meanwhile, the Retail Sales Control Group grew by 0.3%, somewhat less than the previous month’s 0.4% growth.
ANZ – Roy Morgan Australian consumer confidence rose 1.8 points to an eight-week high of 84.1.
ANZ – Roy Morgan Australian consumer confidence rose 1.8 points to an eight-week high of 84.1. While ANZ adds that the rise was broad-based, confidence remained negative.
Goldman Sachs and Citi economists have cut their projections for China’s GDP growth in 2024 to 4.7%, falling shy of Beijing’s aim of 5.0%. SocGen refers to the scenario as a “downward spiral,” while Barclays labels it “from bad to worse” and a “vicious cycle.” Morgan Stanley warns that “things could get worse before they get better,” according According to a Reuters report.
The University of Michigan’s Consumer Sentiment Index increased to 69.0 in September, beating market estimates of 68.0 and setting a four-month high. This increase represents a steady recovery in consumers’ views of the US economy following months of falling economic expectations.
China’s economy worsened in August, with a sustained downturn in industrial output and falling real estate prices, as Beijing confronts mounting pressure to increase spending to stimulate demand. According to Business Standard, the National Bureau of Statistics published this on Saturday.
Michele Bullock of the Reserve Bank of Australia (RBA) remarked that rate decreases are premature due to persistently rising inflation. Furthermore, RBA Assistant Governor Sarah Hunter stated that the labor market remains Wage growth appears to have reached its pinnacle and is anticipated to slow further.