It has been a rough week for the Australian dollar, which has is down close to 2 per cent this week. AUD/USD is currently trading at 0.7232, down 0.28% on the day.
Soft job numbers could extend Aussie slide
Australia releases key employment data early on Thursday, and the forecast is not encouraging. The economy is expected to have shed 42.5 thousand in July, after a gain of 29.1 thousand in June. The unemployment rate is projected to tick upwards to 5.0%, up from 4.9%. Wage growth data was released today, with Q2 showing a gain of 0.4%, down from 0.6% in the previous two quarters.
With much of Australia under lockdown due to the outbreak of the delta variant of Covid, employment numbers could get worse and send the Australian dollar lower. The currency has fallen 1.9% this week and earlier today fell to a 10-month low. Unless the upcoming job numbers are stronger than expected, it could continue to be a rough week for the Australian dollar.
The Federal Reserve will host a summit in Jackson Hole next week, and the meeting will be closely watched for any signals regarding a taper, possibly at the December meeting. Fed Chair Powell has taken great pains to telegraph his plans and keep the market in the loop. A tapering of the asset purchase program would be a massive move, and the Fed would make sure to clearly notify the markets of its plans at Jackson Hole or at the September meeting. With investors on the alert for a tapering signal, and an upsurge in Covid sapping confidence in the global recovery, sentiment towards the safe-haven US dollar should remain strong.
- There is resistance at 0.7328, followed by resistance at 0.7401
- 0.7225 is fluid in support. Below, there is support at 0.7103
For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-event
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