Australian employment data was mixed: the number of jobs dropped by 8.8K, significantly worse than a gain of around 5K jobs that was predicted. However, the unemployment rate surprised by dropping from 5.2% to 5.1%, beating expectations of a rise to 5.3%.
On this background, AUD/USD staged a recovery, rising above 1.02 and returning to trade above downtrend support that was broken earlier.
The jump can be clearly seen:
AUD USD Jumps – Click image to enlarge
One of the reasons for the drop in the unemployment rate was a slide in the level of participation in the workforce, from 65.2% to 65%, This level was last seen at the beginning of 2007.
Without the drop in the participation rate, the unemployment rate would have been 5.4%. However, the divide between part time and full time job changes is somewhat encouraging: 9300 part time jobs were lost, so there actually was a minor gain of around 500 jobs to counter the drop in part time jobs.
AUD/USD was trading as low as 1.0164 following the GDP data yesterday. The publication of the employment data gave the pair reasons to rise and it is now at 1.0229. Note the recapture of the downtrend line.
All in all, the Australian economy is still OK, but the future seems worrying as the mining sector is weakening after a long and very successful era. Other parts of the economy weren’t as strong as mining.
For more on the Aussie, see the AUD/USD.
