The Australian dollar showed its weakness once again, by eventually sliding despite good employment data.
Australia gained 38.5K jobs in Jul, far better than 10K expected. The initial reaction was indeed positive, with the pair hitting a high of 0.7391. Yet as with the RBA decision, things turned sour afterwards.
In June, Australia gained 7K jobs, so this also shows how strong the gain was. The unemployment rate rose to 6.3% from 6.1%, but that came hand in hand with gain in the participation rate to 65.1% from 64.8%, so there is nothing to be worried about here.
In fact, the significant growth in the participation rate is yet another sign of a stabilizing economy.
A notion of stabilization has also come from the RBA, which changed its language on the Australian dollar. The RBA did acknowledge the fall and does not seek more falls to meet the economy’s needs.
AUD/USD
After the RBA, AUD/USD shot up to 0.74 but eventually fell. Also here, we had a jump from around 0.7350 to 0.7390 but the pair fell to a low of 0.7320 quite quickly afterwards.At the time of writing, it trades around 0.7330.
The next moves of the pair now depend on the US and its own jobs report, awaiting us on Friday.
More: AUDUSD Inside Day – Waiting for Bearish Breakouts
