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

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Published: Aug 6, 2015, 04:27 UTC

Analysis and Recommendation: The AUD/USD tumbled further this morning after monthly employment data showed a significant jump in the unemployment rate.

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

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