The Australian dollar enjoyed a short relief thanks to the RBA meeting minutes, but this correction seems to have been a sell opportunity. AUD/USD fell back to the lower range under 0.73
While the USD is gaining ground all across the board thanks to a hawkish tone from 3 FOMC members, the Australian dollar remains the weakest link, suffering the biggest losses.
There are three reasons for this:
- Disappointing Australian wages: The Australian Wage Price Index rose only 0.4%, worse than 0.5% expected. Also year over year, the rise is only 2.1% and not 2.2% expected.
- Worries about Chinese debt: The story about a credit bubble in the Chinese private sector and especially around housing is not new, but it has been echoed several times, especially after The Economist made an in-depth article. The headlines and comments are incessant.
- Caution ahead of the Australian jobs report: After a few strong months of job gains, the labor market cooled down in the land down under. A positive surprise was seen in the March report, but many analysts see this as a one-off. The expectations for the April report coming out soon are already lower and probably for good reasons.
See how to trade the Australian jobs report with AUD/USD.
Here is how it looks on the hourly chart:
