Lousy Australian jobs data is offset by internal developments such as a good management of coronavirus pandemic and a positive trade surplus. The AUD/USD pair is expected to trade between 0.6750-0.6930 in the short-term but analysts at Westpac forecast the aussie at 0.70 by the end of the third quarter.
Key quotes
“Australia’s May labour force survey was a sour note in what has been a fairly hopeful economic story in recent weeks. Around 835k jobs are estimated to have been shed in two months and the unemployment rate jumped to 7.1%, a high since Oct 2001. While the JobKeeper package has provided vital support, it seems that Australia is likely to avoid a 10% unemployment rate in large part due to a 20-year low in labour force participation.”
“The A$ domestic story remains supportive, with states loosening restrictions despite an uptick of Covid-19 cases in Victoria and the trade balance firmly in surplus.”
“We have raised our end-Sep forecast to 0.70, but near-term the risks are sideways to lower, with US ‘second wave’ headlines likely to continue and geopolitics chipping away. Most trade likely to be within the 0.6750-0.6930 range.”
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