Australian dollar rises on ease in `North Korea tensions
Published on 12.03.2018 10:33

The Australian dollar is continuing to climb in today’s trading session, following on from last Friday’s surge after news surfaced that a meeting between US president Donald Trump and his North Korean counterpart Kim Jung Un was due to take place in the nearest future.

The Aussie dollar has suffered in recent times as investors chose to avoid the riskier currencies in favour of the US dollar and Swiss Franc among others.

If the meeting goes well and North Korea agree to begin the process of denuclearization the Australian dollar is likely to fall further out of favor with the market and more losses are expected.

The latest jobs report released last Friday is also bound to put the Australian dollar under pressure because after the release, the chances of the US Federal Reserve hiking interest rates this month grew to over 90 percent.

The non-farm payrolls figure released to the market showed the number of new jobs added the US economy sharply increased by 313,000 in February, according to the US Labor Department which marks the biggest increase in over 1.5 years.

 

Apart from lifting rates this month, the news is bound to keep the Fed on track to lift rates a total of 4 times this year which will boost the US dollar at the expense of currencies such as the Australian dollar.

 

"Although the unemployment rate ticked up and average hourly earnings growth slowed, the most important takeaway is that these numbers are strong enough for the Federal Reserve to raise interest rates later this month," said BK Asset Management managing director of FX strategy Kathy Lien

The Australian dollar is continuing to climb in today’s trading session, following on from last Friday’s surge after news surfaced that a meeting between US president Donald Trump and his North Korean counterpart Kim Jun Un was due to take place in the nearest future.

The Aussie dollar has suffered in recent times as investors chose to avoid the riskier currencies in favour of the US dollar and Swiss Franc among others.

If the meeting goes well and North Korea agree to begin the process of denuclearization the Australian dollar is likely to fall further out of favor with the market and more losses are expected.

The latest jobs report released last Friday is also bound to put the Australian dollar under pressure because after the release, the chances of the US Federal Reserve hiking interest rates this month grew to over 90 percent.

The non-farm payrolls figure released to the market showed the number of new jobs added the US economy sharply increased by 313,000 in February, according to the US Labor Department which marks the biggest increase in over 1.5 years.

Apart from lifting rates this month, the news is bound to keep the Fed on track to lift rates a total of 4 times this year which will boost the US dollar at the expense of currencies such as the Australian dollar.

"Although the unemployment rate ticked up and average hourly earnings growth slowed, the most important takeaway is that these numbers are strong enough for the Federal Reserve to raise interest rates later this month," said BK Asset Management managing director of FX strategy Kathy Lien

The material published in on this page is produced by the FIBO group companies, and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Andrew Masters

Analyst

The world of trading has no boundaries

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this broker. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

×

Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this broker. Before deciding to trade foreign exchange you should consider whether you understand how CFDs work, your investment objectives, your level of experience and readiness of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.

Important notice
By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.