The Australian jobs market is having an excellent 2017. Most jobs reports have beaten expectations. Employment is rising and unemployment is falling. The figures for August were exceptionally good. Nevertheless, AUD/USD is struggling to recapture the battle level of 0.80 it recent struggled to recapture.
Are further falls coming?
The economy of the land down under gained no less than 54.2K jobs in August, far better than 20K expected. The unemployment rate remained at 5.6%, but the participation rate jumped from 65.1% to 65.3%, a very healthy rate.
The big leap in jobs came on top of an upwards revision for the month of July: 29.3K were gained against 27.9K originally reported. The composition of those additional positions was also favorable: 40.1K full-time jobs were added and part-time jobs stood at 14.1K.
There is nothing not to like in this publication. It ticks all the right boxes. AUD/USD initially responded positively, gaining some 40 pips and topping the 0.80 level. However, this did not last and the pair reversed its gains before the European session began.
When a currency cannot rise on good news, it is weak.
Some of the reaction can be attributed to the strength of the US dollar. For the greenback, hardly OK is more than good enough. But that’s far from being the whole story.
Is the Aussie scared of the RBA? The central bank complained about the exchange rate in its recent rate decision, but that is nothing new. However, Phillip Lowe and his team are in no rush to raise rates, and that holds the Aussie back, despite superb data.
Here is how the recent moves look on AUD/USD chart. The shallow rise in the pair and the quick reversal tell the story.
More: AUD/USD: Spec Bet & Technical Setup Increasingly Bullish; Levels To Watch – BTMU
