The Aussie dollar takes the top spot once again, continuing its domination of the other majors during the pandemic recovery environment.
We also got net arguably net positive economic updates this week from Australia, highlighted by a better-than-expected read on the employment situation.
Australian Headlines and Economic data
No major catalysts from Australia on the session, but the Aussie did get started on the week off on the right foot. This was likely due to broad risk-on sentiment, which has been the driving theme sparked by optimism as covid vaccines are distributed and covid cases fall.
“members noted that the recovery in the second half of 2020 had been faster than initially expected, in line with the pattern observed internationally.”
“In discussing the outlook for activity and the labour market, members noted that the forecasts under the baseline scenario had been upgraded relative to 3 months earlier. This upward revision incorporated the stronger starting point for the forecasts and improved outlook. GDP and employment were now expected to reach their pre-pandemic levels over the course of 2021, around 6–12 months earlier than previously expected.”
“Turning to the outlook for inflation, members noted that underlying inflation pressures were subdued and expected to remain so in the period ahead. Although the outlook for underlying inflation had been revised up a little relative to 3 months earlier, ongoing spare capacity and low wages growth were expected to keep underlying inflation below 2 per cent over the forecast period.”
“The expected inflation rate (30-per-cent trimmed mean measure), reported in the Melbourne Institute
Survey of Consumer Inflationary and Wage Expectations, rose by 0.3 percentage points in February to 3.7%”
- Participation rate decreased to 66.1%.
- Underemployment rate decreased to 8.1%.
- Monthly hours worked decreased by 86 million hours.
“Full-time employment figures also increased by 59,000 people, while part-time employment decreased almost 30,000, which experts have deemed positive.”
“Flash Australia Manufacturing PMI Feb: 56.6, 2-month low (Jan final: 57.2)”
“Sustained new order growth, rising backlogs of work and stronger confidence – expectations hit their highest for two-anda-half years in February – led companies to expand their staffing levels”