The Australian dollar resurgence against the dollar, after taking a hit in Wednesday trading session, continues to gather pace. The AUD popped higher after employment data came out better than expected, showing that the economy added more jobs than initially feared.
The AUD, just like other major currencies, have come under immense pressure in recent weeks amidst concerns of a looming recession triggered by the Coronavirus pandemic. The better than expected data has seen the Aussie dollar attracting bids in the market amidst strength in the U.S Dollar in the recent trading session.
The AUD/USD rose to session highs of $0.6305 in Thursday session as employment data showed the economy added 5.9k jobs in March versus expectations of a 40k drop. In February, the economy added 27.3k jobs. The jobless rate rose to 5.2% in March from 5.1% in February. However, it was still better than the 5.5% that the market expected.
Australian dollar strength could, however, be short-lived as the employment data does not paint a clear picture of the damage caused by the Coronavirus pandemic. The survey for the employment data was carried out in the first two weeks of March.
In contrast, the social distancing measures designed to curb the spread of the deadly virus came in the second half of the month. April’s employment data release should shed more light on how the economy is doing amidst the COVID-19 pandemic.
Conversely, the Australian dollar could come under pressure against the U.S Dollar amidst concerns that the Australian economy is not doing well. Dollar strength, given that the greenback acts as a safe haven for storing wealth in times of crisis, could consequently see AUD/USD pair continue to edge lower.
Unlike other major currencies, the U.S Dollar has continued to strengthen even on economic data arousing concerns about the health of the U.S economy. Weak retail sales data, as well as soaring unemployment levels, were expected to trigger Dollar weakness. However, that has not happened.