Australia reported a gain of 17.4K jobs in August, better than 5.2K that had been expected. The unemployment rate dropped to 6.2%. And also some news from China helped this time.
The Australian dollar emerged above 0.70 once again. Can it hold on this time?
Australian jobs report
Apart from the big gain in jobs for August, also last month’s figure was upgraded: from 38.5K to 39.2K. For August, the land down under saw an increase of 11.5K full time jobs and 5.9K part time jobs. So, the composition is also favorable.
The drop in the unemployment came on top of a slide in the participation rate: 65% after 65.1% beforehand, so there’s nothing to get excited about on this front.
All in all, it seems that the slowdown in the mining sector is not killing the Australian labor market.
Chinese developments
Inflation in China is on the rise, at least for consumers: an annual rate of 2% was seen in August, higher than 1.9% predicted and above the 1.6% level seen in July. The Producer Price Index disappointed with yet another negative number, deeper than estimations: at 5.9%, yet markets focused on the more important CPI.
Another positive development came from the exchange rate: the offshore spot yuan gained 1%, the biggest gain on record in this very controlled currency and reached 6.39 against the dollar, the highest in a month. The efforts to stabilize the yuan seem to be working for now.
AUD/USD
The Aussie was hit hard last week but with calmer markets, it returned to flirt with the 0.70 line. The recent news sent it above 0.70 again and it even topped the previous high of 0.7050, peaking at 0.7092.
In order to break above 0.71, it would probably need more momentum.
More: AUD/USD: Daily Morning Star; – SocGen
