AUD / USD, Chinese GDP, Australian job hotspots:
- Australian job data exceed headline figures, but increased working hours reflect NSW locks
- AUD / USD may try to test 0.7500, as Fed chairman Jerome Powell says it’s easy to stay afloat
- China’s GDP is showing a year-on-year decline, but QoQ data exceed consensus estimates
Australian job data became mixed on Thursday morning as the country struggles with coronary virus locks. The change in employment in June increased by 29.1 thousand jobs, exceeding the consensus forecast of 20 thousand. This job growth helped reduce the country’s unemployment rate from 5.1% to 4.9%. Of particular note is the reduction in monthly working hours to -33 million. This is likely to be the result of numerous closures due to the spread of Covid variants in several metro areas. A mixed data bag is a headache for market participants AUD/USD remains under pressure as the fundamental outlook in Australia deteriorates.
Australian job data
Consent of Statistics Australia
AUD / USD appears to have downgraded the renewed Greenback in June following its recent downward trend FOMC meeting. The pair found support on the September 2020 swing and has consolidated between its previous high and 0.50 Fibonacci level of 0.7500. As Federation President Jerome Powell said Wednesday that a favorable monetary policy is not going anywhere anytime soon, the AUD / USD may seek a rebound against the backdrop of the 0.70000 Greenback weakness. Fears of the virus continue to weigh on the mood as territorial restrictions added to the Aussie’s June decline. If the pair breaks back above 0.7500, resistance can be found at 0.618 with a Fibonacci level of about 0.7620.
AUD / USD daily chart
The chart is created using TradingView
China’s GDP data became mixed on Thursday as market participants undoubtedly followed closely following recent comments and political action in Beijing. While annual growth was estimated at 7.9%, both quarterly and retail data exceeded expectations. Despite expectations, both publications fell short of previous readings, further raising concerns that the Chinese economy may slow down.Industrial production also beat expectations, growing by 8.3% year-on-year compared to the consensus estimate of 7.8%.
Courtesy DailyFX economic calendar
Thursday’s GDP release comes at a time when fears are rising around the world over a possible slowdown in the Chinese economy. Which may be a warning sign to the global community, the People’s Bank of China (PBOC) reduced reserve requirements by 0.5% in an effort to stimulate domestic borrowing. As most developed economies plan to unravel pandemic stimulus programs, China is stepping back to ease financial conditions. It may be worrying to market participants that if China starts to slow down, the world economy may not expect this during the post-pandemic boom. The slower growth of the Chinese economy may affect the sentiment of market participants around the world, as investors see the impact of base effects as the main impact of economic calculations.
– Written Brendan Fagan, DailyFX intern
To contact Brendan, use the comments section below or @BrendanFaganFX Twitter