AUD/USD is lower on Thursday, as the pair has dropped below the 0.94 line. On the release front, Australian Employment Change surprised the markets, climbing to a three-month high. However, Unemployment Rate increased in June. As well, MI Inflation Expectations continues to head lower. In the US, Unemployment Claims dropped to their lowest level in six weeks.
Australian employment data was a mix on Thursday. Employment Change rebounded in May with a strong gain of 15.9 thousand, easily beating the estimate of 12.3 thousand. At the same time, Unemployment Rate rose to 6.0%, the highest level seen since February. This edged above the estimate of 5.9%. Earlier in the week, Consumer Sentiment jumped 1.9% in June, its highest level since last October. Analysts closely follow this indicator, since increased consumer confidence usually translates into stronger consumer spending, which is a critical component of economic growth. This release follows strong numbers from NAB Business Confidence and ANZ Job Advertisements, which both improved in June.
In the US, Unemployment Claims dropped, as employment data continues to impress. The key indicator dropped to 304 thousand, well below the estimate of 316 thousand. Employment numbers for June have looked sharp, led by a jump in Nonfarm Payrolls and a drop in the unemployment rate. The strong employment numbers have increased speculation about an interest rate hike by the Federal Reserve, and remarks by Fed policymakers will be under the market microscope.
The Federal Reserve minutes did not shed much light on when the Fed plans to raise interest rates, but policymakers did agree to wind up the QE scheme by October. The asset purchase program flooded the economy with over $2 trillion, and the Fed has been steadily reducing the program since last December. Winding down QE will require several more tapers by the Fed, but that shouldn't pose a problem, given the solid employment data the economy has been churning out.
AUD/USD for Thursday, July 10, 2014
Further levels in both directions:
OANDA's Open Positions Ratio
AUD/USD ratio is pointing to gains in long positions in Thursday, reversing the trend from a day earlier. This is not consistent with the movement of the pair, as the Australian dollar has posted losses. The ratio is almost evenly split between long and short positions, indicative of a lack of trader bias towards where the Australian dollar is headed.
*Key releases are highlighted in bold.
*All release times are GMT
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