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Australian dollar rises after upbeat employment data

Australian dollar rises after upbeat employment data

The Australian dollar rose during Thursday’s trading after the release of economic data showing employment growth and low unemployment rate, thereby lowering expectations the Reserve Bank of Australia would cut interest rates next month.

As of 08:03 GMT, the Australian dollar rose against the U.S dollar by 0.41 percent to trade at 0.6872, bouncing back from its lowest level since December 11 and halting its longest daily loss streak in six months.

Labor market data released today showed that the unemployment rate fell to 5.1 percent from 5.2 percent in November. Analysts had predicted a stability at 5.2 percent.

The employment index showed a rise of 28,900, following a soar of 38,500 in November, beating expectations of a rise of 12,200.

These positive data reinforced the RBA's view that the Australian economy has reached a slight turning point.

Analysts believe the RBA will not take stimulus measures at the February meeting, despite the economic damage caused by the forest fires and the potential fall in near-term growth prospects as it appeared in consumer spending data in output data from GDP during the third quarter.

Now, estimates are in favor of seeing an interest rate cut by 25 basis points to 0.50 percent in April, instead of February, therefore giving some relief to the Aussie dollar.

Meanwhile, the dollar index, which measures the performance of six major currencies against the U.S dollar, rose by 0.02 percent at 97.31.

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