All the fundamental lights seem to be turning green for the Australian dollar at the same time. Following the ‘surprise’ rate hike from the RBA Tuesday morning, the economy reported unexpected job growth through September.
According to the Australian Bureau of Statistics, 40,600 net jobs were added last month and the unemployment rate ticked down from its than six-year high to 5.7 percent. After this positive round of data, the modest doubt for a follow up rate hike that had developed over the past few days was completely banished. The market is now pricing in a 99 percent probability of a 25bps hike on November 2nd. However, the Aussie currency has covered a lot of ground and quickly these past few weeks considering it has already been deemed the strongest performer among the majors. It is now running the risk of overextending itself.