AUD Ignored The Fall In Headline Jobs - Here's Why.
Looking at the headline miss in Australian jobs last night, we can see the AUD completely ignored the negative signs. This is down to the composition of the type of employment generated. The fall was all down to a loss of 23k part-time jobs, offset by a decent 19k gain in full-time positions so the news was not all that bad when looking at the components.
We also saw the unemployment rate easing back from 5.4% to 5.3% and this was partly down to the small decline in the participation rate, which includes working-age population and those actively seeking work. As such, it does offer some insight into how unemployment affects the economy and the general well being, i.e. household income.
On this basis, we saw AUD/USD continue to move up tentatively as the USD came off its highs. Overall, this looks to be corrective as yet, though we are seeing interest to start buying the AUD at these levels with stronger support seen in the 0.7100-0.7000 lower down. This tends to draw in longer-term buyers who can weather some downside.
It is also worth noting that there is strong weekly trend line support in the mid 0.7000's, which will also attract buyers -especially those who consider AUD valuations as extreme as well as a potential recovery in base metals prices. All looks unlikely as yet, though there are always 2 sides to a market.