The Australian economy lost jobs in July, but this disappointment was followed by robust Chinese trade data, and this was certainly encouraging for the Australia and had a stronger impact on the A$.
The Australian dollar is recovering and making a convincing move above the all-important 0.90 left. Has it indeed found a bottom?
The Australian economy shed 10.2K jobs instead of gaining 6.2K expected for July. June’s numbers were revised to the downside: from a gain of 10.3K to 9.3K. The unemployment rate surprised by remaining unchanged at 5.7% and didn’t rise to 5.8%, but this came thanks to a drop in the participation rate from 65.3% to 65.1%. Full time employment fell more than part time.
China’s trade balance came out at a surplus of 17.82 billion, below expectations of around +27 billion, but the details are more important: exports grew by 5.1%, more than 2% expected. Imports (some from Australia), jumped by 10.9%, exceeding predictions of +1%.
It’s important to note that last month’s numbers were both negative and worrying. So, this new growth serves as a relief for Australia and also from the global economy.
AUD/USD
The Australian dollar already made moves above 0.90, rising on the dollar’s weakness (due to the absence of pro-taper news), but couldn’t conquer this level.
However, after the Chinese data, AUD/USD had the momentum to reach 0.9089. Resistance lies at 0.9127, which was firm support in late July, and then at the round number of 0.92. The really strong resistance line is 0.9315.
On the downside, 0.90 is clearly support, followed by 0.89. For more, see the AUDUSD forecast.
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