- Australian Dollar (AUD) picks up after a slow start as job advertisements slow
- Australian unemployment expected to reach 10% by the end of the year
- US Dollar (AUD/USD) moves lower versus major peers after strong job opening data for June
- Attention turns to Washington to see if a stimulus deal can be reached
After a steep selloff on Friday the Australian Dollar US Dollar (AUD/USD) exchange rate is pushing higher on Monday. The pair dived 1% on Friday to settle at US$0.7158. Despite the sharp drop, the pair still managed to eke out 0.2% gains across the week.
At 14:15 UTC, AUD/USD trades +0.25% at US$0.7177. This is at the top end of the daily traded range of US$0.7140 – US$0.71785.
The Australia Dollar started the week on the back foot following weaker job advertisements in July. The ANZ job advertisements rebounded 16.7% in July, with total jobs ads climbing to 104,916. This was up from a low of 63,565 in May. However, this was down significantly from June’s 42% increase. Ads are still down 34% compared to July last.
The pace of gains slowed, especially in the second half of the month as a second wave of coronavirus infections resulted in lockdown measures being re-imposed in Melbourne. The renewed lockdown restrictions will have almost certainly impacted the recovery in the labour market. The ANZ vacancies release is a closely watched data point by the Reserve Bank of Australia.
The latest figures revealed the unemployment rate for Australia to be 7.4%. Economists expect unemployment to reach 10% in Australia by the end of the year.
Looking ahead investors will focus on Australia’s National Bank Business Confidence data for July. Investors will be keen to see whether the outbreak in Melbourne is denting business morale.
The US Dollar started the week on a stronger note. However, slowly lost strength as the European session wore on and despite a strong JOLTS job opening reading.
5.89 million new jobs openings were recorded in June. This data is slightly out of date given Friday’s stronger than forecast non-farm payroll report. However, it still shows that the US economic recovery and the recovery in the labour market was on track in June.
This was the only high impacting US data due for release today. Investors will now keep an eye on Washington to see whether any more progress will be made towards a new rescue package.
