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Australian Dollar slumps on employment figures

AUD - Australian Dollar

The Australia Dollar opens lower this morning after weaker than expected employment figures saw the AUD/USD pair shed an instant 40-pips pulling it under 68c. Employment change slumped heavily as the economy lost 19,000 jobs in October from an expected addition of 15,000, meanwhile the employment rate bounced back from 5.2 percent to 5.3 percent. Markets reacted selling the Aussie as the numbers have once again rekindled the likelihood of a December rate cut by the Reserve Bank of Australia (RBA). China’s key Statistics added to AUD/USD weakness with news that China’s industrial output grew significantly slower than expected in October.

Looking ahead, in Australia the RBA Deputy Governor Guy Debelle is due to participate in a panel discussion about mortgage arrears at a luncheon, hosted by the Financial Services Institute of Australasia in Sydney. Markets will be listening in for any comments regarding yesterdays numbers and the RBA’s future moves. Retails Sales are due out of the U.S, spending is expected to rebound in October, with economists predicting 0.2 per cent growth in retail sales.

From a technical perspective, the Aussie is currently trading at 0.6785. We would expect to see support on moves approaching 0.6775 followed by 0.6700, while any upward push will likely meet resistance at 0.6840.

Key Movers

The US Dollar Index which measures the strength of the Greenback against a basket of six major currencies has taken a fall as the number of Americans applying for unemployment benefits rose to an unexpected five-month high. Initial jobless claims rose 14,000 to a seasonally adjusted 225,000 in the seven days ended Nov. 9. That’s the highest level since late June. Meanwhile, Federal Reserve Chairman continued speaking to Congress on Thursday, the Fed expects to see continued growth and that a slowdown in manufacturing is being offset by strong consumer spending.

Over in the U.K, retail sales dropped for the month of October by 0.1 percent which was a surprise in the run-up to Christmas and shows that shoppers had become reluctant to spend in the lead up to the Brexit deadline. There was also speculation that recent declines in employment and wages growth had deterred consumers from spending on big-ticket items such as furniture and cars. GBP/USD is currently buying 1.2879.

Expected Ranges

AUD/USD: 0.6725 - 0.6840 ▼

GBP/AUD: 1.8800 - 1.9090 ▲

AUD/NZD: 1.0600 - 1.0710 ▼

AUD/EUR: 0.6080 - 0.6220 ▼

AUD/CAD: 0.8900 - 0.9060 ▼