AUD/USD declines to near 0.6530 even as Aussie employment data meets estimates

AUD/USD falls to near 0.6530 as the Australian Dollar weakens despite Aussie labor market data meeting estimates.
The Australian Unemployment Rate decelerated to 4.2%, as expected.
Intensifying Fed interest rate cut expectations have battered the US Dollar.

Sagar Dua FXStreet

The AUD/USD pair trades 0.3% lower to near 0.6530 during the European trading session on Thursday. The Aussie pair faces pressure as the Australian Dollar (AUD) underperforms even as the Australian labor market data remained upbeat in July.

Australian Dollar PRICE Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.17%	-0.07%	-0.53%	0.14%	0.30%	0.51%	0.14%
EUR	-0.17%		-0.23%	-0.70%	-0.06%	0.10%	0.30%	-0.06%
GBP	0.07%	0.23%		-0.48%	0.27%	0.40%	0.63%	0.28%
JPY	0.53%	0.70%	0.48%		0.69%	0.81%	0.92%	0.62%
CAD	-0.14%	0.06%	-0.27%	-0.69%		0.19%	0.36%	0.00%
AUD	-0.30%	-0.10%	-0.40%	-0.81%	-0.19%		0.24%	-0.23%
NZD	-0.51%	-0.30%	-0.63%	-0.92%	-0.36%	-0.24%		-0.39%
CHF	-0.14%	0.06%	-0.28%	-0.62%	-0.00%	0.23%	0.39%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

Australian Bureau of Statistics (ABS) reported earlier in the day that the economy created fresh 24.5K jobs, almost in line with estimates of 25K, and significantly higher than the prior reading of 1K. The Unemployment Rate decelerated to 4.2%, as expected, from 4.3% in June.

Steady labor market conditions would allow the Reserve Bank of Australia (RBA) to avoid an aggressive monetary easing stance.

Meanwhile, the US Dollar (USD) trades cautiously ahead of the United States (US) Producer Price Index (PPI) data for July, which will be published at 12:30 GMT. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, struggles to find ground near the weekly low of around 97.60.

Economists expect the US producer inflation to have grown at a faster pace on a monthly as well as an annual basis.

The US Dollar has been underperforming against its peers as traders are increasingly confident the Federal Reserve (Fed) will reduce interest rates in the September monetary policy meeting.

Economic Indicator

Unemployment Rate s.a.

The Unemployment Rate, released by the Australian Bureau of Statistics, is the number of unemployed workers divided by the total civilian labor force, expressed as a percentage. If the rate increases, it indicates a lack of expansion within the Australian labor market and a weakness within the Australian economy. A decrease in the figure is seen as bullish for the Australian Dollar (AUD), while an increase is seen as bearish.

Why it matters to traders?

The Australian Bureau of Statistics (ABS) publishes an overview of trends in the Australian labour market, with unemployment rate a closely watched indicator. It is released about 15 days after the month end and throws light on the overall economic conditions, as it is highly correlated to consumer spending and inflation. Despite the lagging nature of the indicator, it affects the Reserve Bank of Australia’s (RBA) interest rate decisions, in turn, moving the Australian dollar. Upbeat figure tends to be AUD positive.

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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