The Australian dollar is one of the best performing G10 currencies today. A stellar jobs report for February can be named as a reason behind the move as it turned out to be much better than expected. Employment gain reached 64.6k, while market expected 49.1k gain, and unemployment rate dropped from 3.7 to 3.5% (exp. 3.6%). Employment gain was not only higher-than expected and driven by full-time jobs, it was also the first increase in employment following two months of declines. While RBA Governor Lowe noted at the latest policy meeting that he is open to more rate hikes should data support such moves, money market's pricing shows that RBA is done with rate hikes. Nevertheless, Lowe said that jobs data is among key reports that it will monitor when making the next rate decision so positive reaction on AUD today should not come as a surprise.
Another G10 currency that is on watch today is EUR. The European Central Bank is set to announce a rate decision at 1:15 pm GMT today. Expectations are mixed - some still see a chance for a 50 basis point rate hike while others expect the ECB to deliver a smaller hike or even leave rates unchanged following recent turmoil in the banking sector. Having said that, the scope for a surprise today is large. A cautious message from ECB President Lagarde during the press conference at 1:45 pm GMT is likely.
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Open account Try demo Download mobile app Download mobile appTaking a look at EURAUD chart at D1 interval, we can see that the pair has launched a pullback recently. The 1.5950 support zone was tested yesterday and again today but bears failed on both attempts. Whether the pair stays above or below this hurdle will likely depend on ECB policy announcement. A smaller than 50 basis point rate could trigger a dovish reaction on the market with EUR taking a hit and EURAUD potentially dropping below the aforementioned 1.5950 support. On the other hand, holding firm to 50 basis points and signaling that SVB-CS turmoil does not change policy view would likely be seen as a hawkish message.
EURAUD at D1 interval. Source: xStation5
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