The British pound has stabilized near its highest level against the US dollar since the Brexit vote in June 2016, as traders took profits while awaiting the latest developments on Brexit negotiations. GBPUSD reached its highest level since June 24, 2016 at 1.3941.
Australian jobs jumped again this morning to equal their longest-term growth on a monthly basis. The economy added 34.7K jobs in December, exceeding expectations of just 9,000 jobs, after adding 63.6 jobs in November. Thus achieving 15 consecutive months of job growth, the longest period of growth since 1993. The labour market participation rate also rose to its highest level since January 2011, yet unemployment rose to 5.5%.
The Australian dollar rose after the data was released, nearing the highest level since last September at levels of 0.7995.
China's economic growth exceeded market expectations after GDP grew by 6.8% in the last quarter of 2017, supported by industrial sector recovery and resilient in the property market as well as strong export growth. The Chinese economy grew by 6.9% on a yearly basis in 2017, the first acceleration of economic growth since 2010.
Economic growth in 2017 exceeded the government's target of 6.5%, after growing by 6.7% in 2016, the weakest pace of growth in 26 years. China's policymakers are now trying to contain financial risks and slow the pace of debt accumulation without affecting economic growth.
Despite the threats to cancel the NAFTA, the Bank of Canada yesterday raised interest rates to 1.25%, the third increase in the past six months and the first time that interest rates have exceeded 1% since 2009, based on positive economic data and a healthy economy, which is on the right track, with continuation of job additions and unemployment settling at the lowest level since 1976.
The economy is expected to slow significantly this year as trading relations with the United States are likely to be affected by the renegotiation of the NAFTA terms, as the Bank of Canada confirmed in its statement that uncertainty about the future of the NAFTA will increasingly weigh on outlook. These talks could have a clear impact on the pace of future rate hikes.
