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The Australian job report has been released as follows, lifting the Aussie on the better than expected jobs numbers, passing 0.7180.

Aussie jobs data

  • Australia July Employment +114.7k s/adj (Reuters poll: +40.0k).
     Australia July Unemployment rate +7.5 pct, s/adj (Reuters poll: +7.8).
    Australia July full-time Employment +43.5k s/adj.
    Australia July Participation Rate +64.7 pct, s/adj (Reuters poll: +64.4 pct).
    Australian Bureau of Statistics says jobs recovered by 343,000, hours worked by 5.5% since May.
    ABS says employment remained over half a million people lower than seen in March.

Westpac analysts, ahead of the release, explained that after a substantial jump in employment in June of 210.8k, the recovery should continue in July at a slower pace.

Westpac and the market expected increases of 40k and 30k respectively.

Rising participation should drive unemployment higher from 7.4% to 7.8%, which would be a high since 1998.

AUD/USD implications

Meanwhile, Australia’s economic recovery will be slowed notably by the Victorian virus resurgence.

Stage 4 restrictions will weigh on the participation rate and leave the unemployment level elevated. 

How much this hurts A$ is an open question, with the RBA consistently pushing back against further easing steps such as negative interest rates. China’s industrial sector rebound also continues to underpin Australia’s resources-driven trade surpluses,

analysts at Westpac argued.

The AUD is the commodity currency which means it is bearing the biggest risk of a correction in the case of further escalation in US-China tensions…

More to come…