The Australian Dollar closed the Thursday session higher, which is a curious outcome for a day that handed the labour market its worst headline in months.
April Employment Change collapsed to an 18.6K contraction against expectations for a 17.5K gain, the jobless rate climbed to 4.5% from 4.3%, and full-time roles led the decline lower
None of that reads like the makings of a currency rally, yet the Aussie spent the US afternoon grinding up off its lows. Borrowed optimism from across the Pacific The explanation sits offshore. Risk appetite caught fire during the US session on chatter that a US-Iran ceasefire announcement was imminent, dragging the US Dollar lower and lifting the high-beta Aussie along with it.
That optimism turned out to be threadbare. Talks remain unresolved, with Iran still pressing to charge tolls on Strait of Hormuz transits and still refusing to bring nuclear material to the table, both of which Washington has flagged as non-starters. The ceasefire that markets briefly pre-celebrated never arrived, which leaves the Aussie’s bounce resting on a premise that keeps slipping away.