USD/AUD Exchange Rate Rallying; Australia Employment Data Flops
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This session has seen the pairing trading at its lowest point of 1.0687, whilst reaching up through the 1.08 threshold attaining 1.0804 at its pinnacle in the currency market.
The ‘Aussie’ appears to be set in a downward momentum in the AUD to USD pairing, dropping against all 31 major currencies by a minimum decline of 0.5% following poor unemployment data on Thursday.
Expert in the field Divya Devesh commented: ‘We’ve seen a big move lower in the “Aussie”. The overall print is not very inspiring, frankly and this just goes on to show some of the structural problems in the economy.’
Australian Unemployment figures jumped to a 12 year high on Thursday, surprising economists following their prediction for the unemployment rate to remain at 6.0%; instead jobseekers totalled 6.4%. Furthermore this position was worsened with the Employment Change figures failing to meet expectations also.
Employment Change data was expected to see 13.2K jobseekers in employment, however the actual publication saw an unfavourable -0.3K.
JP Morgan economist Ben Jarman stated: ‘If you look at the headline numbers, the issue is not that we’re losing jobs en masse it’s just they’re not moving higher fast enough, given how strong the growth in the working age has been. Australia has a strong population growth, strong inbound migration and we’re not finding enough jobs to meet that increase in supply of labour as it comes in.’
However, not all economists feel today’s data has such a negative reflection of the Australian economy. The job market has created a vast number of full time jobs in 2014, totalling close to 109,000.
Economist Craig James suggests: ‘A healthier economy, improved job prospects and, more importantly, a noted lift in job advertisements have resulted in more people searching for work, with an ongoing lift in the participation rate over the last couple of months.’
Conversely the US Dollar has stolen the spotlight in the currency market. The US economy is awaiting the release of Initial Jobless Claims and Continuing Claims figures this afternoon, which if they prove favourable could cause the ‘Buck’ to rally higher.
The US has produced surprising results in the currency market of late, and although the current forecast for Initial Jobless Claims is expected to see a rise in comparison to the previous week, the figures may still prove favourable.
Initial Jobless Claims are expected to rise by 304K in comparison to the previous 302K. Furthermore Continuing Claims figures are expected to reach 2500K, a slight drop from the former 2539K.
At present, the US Dollar is likely to remain bullish against all other majors; however the Australian Dollar is prone to depreciation following such negative employment figures.
The AUD to USD exchange rate is residing at 0.9267.