August 19, 2021

Despite Positive Jobs Data, AUD Still Turning!

 The focus of today’s Asian session was on the publication of Australian employment data which unexpectedly showed a drop in the unemployment rate in July, as the country was again hit by a pandemic.

The Australian Bureau of Statistics (ABS) reported the unemployment rate fell to 4.6%last month, much better than expected to rise 5%, and down from the previous month’s reading of 4.9%.

In addition, the data also showed the Australian economy added 2,200 jobs over the past month, but working hours were down 0.2%. Analysts expect nearly 50,000 jobs to be lost in July.

This reading is not expected as the market predicts an increase in unemployment following the re-implementation of sanctions measures in Sydney, Melbourne and some areas of New South Wales (NSW) following the surge in Covid-19 cases.

Jobs in NSW dropped by 36,000 in July, with fewer people active in the workforce. The country's labor force participation rate fell 0.2% to 66.0%, ABS reported.

However, the Aussie dollar failed to rise following the release of this positive data, instead falling lower to a 9 -month low against the strong US dollar.

This is because, the market expects the situation to worsen in August following the extended closure measures and further extended to other affected provinces as the number of daily infection cases continues to show an increase.