Australia adds 17k new jobs as unemployment falls to 6.2%

Sep 10, 5:42 am

The Australian economy added over 17k new jobs in the month of August beating the median consensus forecasts of 5.2k. Jobs growth came from a rise in full time employment which gained 11,500 while the part time jobs increased by 5900. The unemployment rate stood at 6.2%, declining from previous month’s 6.3% as the participation rate fell to 65% from 65.1%. Most of the job gains came from the construction and tourism sector which has managed to absorb the workforce as the mining sector continues to weaken on falling commodity prices.

The better than expected jobs report shows the Australian unemployment rate ranging between 6.0% – 6.3% and is largely seen as a sign of a healthy trend despite moving at a slower pace. The data is likely to push the RBA to keep interest rates steady at its next meeting although more data is required to be gauged. The Central bank had left interest rates unchanged at its meeting earlier this month and conditions were seen to be stabilizing as the housing market sector was showing signs of cooling down which has been a major concern for the RBA since the start of this year.

The Aussie dollar was however weak against the Greenback with AUDUSD down -0.10%. However the bigger gains came from AUDNZD which saw a sharp spike as the Aussie surged to a rate cut from the RBNZ as well as keeping its statement very dovish leaving room for further rate cuts. AUDNZD was seen trading near the main support level of 1.102 – 1.0935 which has managed to hold any declines in the currency pair since mid-June this year. The next major resistance on AUDNZD comes in at previous highs of 1.1384.

The Aussie’s rally was however muted largely thanks to the data from China which was mixed. Consumer inflation on an annualized basis managed to rise to 2.0% after falling to 1.6% last month. However the gains were offset by a continued decline in the producer prices which fell -5.9% for the month, down from -5.4% last month.

The Asian trading session was volatile on account of the data releases from Australia, New Zealand and China.

Later in the day the Bank of England will be releasing its monetary policy statement with expectations largely tuned for the interest rates to remain unchanged, while expectations ride high for the MPC vote count to see more than one dissenter voting in favor of a rate hike. The British Pound was seen trading subdued today after posting a strong rally for the first part of the week. An unchanged MPC vote count is most likely to see the GBP decline ahead of next week’s FOMC meeting and tomorrow’s producer price index and UoM inflation expectations data which will be the final piece to the puzzle ahead of the two-day meeting.

GBPUSD rallied to as high as 1.5492 before easing back after the currency declined to the lows of 1.5175 last week.

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John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.

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