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At a glance:
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AUD strengthened after solid Australian employment data
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Unemployment fell for a fourth straight month; hours worked rose 0.6%
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RBA March hike expectations firmed, though not locked in
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Japan machinery orders surged 19% m/m, supporting capex outlook
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Iran strike rumours persisted
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Korea’s KOSPI hit a record high
The Australian dollar was the standout mover during the session, gaining ground as markets leaned further toward the possibility of a Reserve Bank of Australia rate hike at its March 16–17 meeting following another firm labour market report.
Headline employment rose modestly, but the underlying detail reinforced the message of a still-tight labour market. The number of unemployed fell for a fourth consecutive month, a sequence last seen in the four months immediately preceding the RBA’s May 2022 rate-hike cycle. Hours worked also climbed 0.6% in January, pointing to solid labour demand.
The data do not lock in a March move, but they keep the RBA’s tightening bias intact. AUD/USD climbed from around 0.7040 to just above 0.7070 before retracing a good portion of the move later in the session.
USD/JPY edged higher in relatively light news flow. However, Japanese data delivered a standout surprise, with core machinery orders jumping more than 19% month-on-month in December, far exceeding expectations for a 4.5% rise. The capex indicator supports the Bank of Japan’s outlook for continued economic expansion, even as fiscal and currency dynamics remain in focus.
Elsewhere, geopolitical chatter persisted around the possibility of a US strike on Iran, with reports suggesting this weekend remains under consideration. The headlines added a layer of caution to broader risk sentiment.
In equity markets, South Korea’s KOSPI surged to a record high as trading resumed following a three-day holiday. Mainland China and Hong Kong markets remained closed, keeping regional liquidity thinner than usual.
This article was written by Eamonn Sheridan at investinglive.com.