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AUD/USD Fundamental Analysis – August 7, 2015 – Forecast

Barry Norman

Analysis and Recommendation:

The AUD/USD tumbled further this morning after monthly employment data showed a significant jump in the unemployment rate. The Aussie is down 24 points at 0.7332. The unemployment rate climbed to 6.3% against expectations of 6.0% reporting higher than last month when a decline was expected, even though there were 38.5 new jobs created.

At first glance it may seem somewhat counter-intuitive that the unemployment rate rose significantly on the back of stronger than expected jobs growth, but this doesn’t account for a significant increase in the labour force participation rate. The labour force participation rate increased to 65.1% from 64.8% (expected 64.8%), its highest level in over two years, which could theoretically explain the jump in the unemployment rate. Looking behind the numbers the implications are that people are returning to the workforce faster than previously expected as workers become more confident about job prospects.

The latest official figures from the Bureau of Statistics show a jump of employment of 38,500 in July after a jump of 7000 in June and 42,000 in May. The combined jump of 87,500 came as the unemployment rate climbed from 6 to 6.3 per cent.

The discrepancy is explained by a jump in the number of unemployed Australians from 771,000 to 801,000. The results come at a time of unusual volatility in the figures following changes in the way the Bureau of Statistics collects the data. On the face of it they show they show a big increase in the number of Australians prepared to look for work as an extra 30,000 described themselves as unemployed and an extra 87,500 found jobs.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Today’s economic releases:

Cur.

 

Event

Actual

Forecast

Previous

 

  AUD

 

Employment Change (Jul)

38.5K

10.0K

7.0K

   

  AUD

 

Full Employment Change (Jul)

12.4K

 

24.9K

   

  AUD

 

Unemployment Rate (Jul)

6.3%

6.0%

6.1%

   

 

Upcoming Economic Events that you should be monitoring:

Friday, August 7, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

  JPY

 

BoJ Press Conference  

 

 

 

 

 

  USD

 

Nonfarm Payrolls (Jul)

 

223K

223K

 

 

  USD

 

Unemployment Rate (Jul)

 

5.3%

5.3%

 

 

  CAD

 

Employment Change (Jul)

 

5.0K

-6.4K

 

 

  CAD

 

Ivey PMI (Jul)

 

52.0

55.9

   

Government Bond Auctions

Date Time Country

Aug 06 10:30 Spain Auctions Bonos

Aug 06 11:10 France Auctions OATs

Aug 10 17:30 Italy Announces details of BTP/CCTeu on 13 Aug

Aug 11 11:30 UK Auctions 0.125% 2058 I/L Gilt

Aug 12 11:30 Germany Eur 4bn Aug 2025 Bund

Aug 13 11:10 Italy Auctions BTPs/CCTeus

Aug 19 11:30 Germany Eur 5bn Sep 2017 Schatz

Aug 19 11:03 Sweden Holds bond auction

Aug 20 10:30 Spain Auctions Bonos/Obligaciones

Aug 20 11:30 UK Auctions 4.25% 2036 Gilt

Aug 21 17:30 Italy Announces details of CTZ/BTPei on 26 Aug

 

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