Australian Dollar receives a little boost from mixed Australian employment statistics.
The Australian dollar (AUD) has been drifting lower over the last week or so due to mounting economic headwinds in China. Aside from that, declining copper prices harmed demand for the resource-linked currency Aussie, however the recent US Dollar (USD) decline helped limit losses for the Australian Dollar pair.
The advent of some USD purchasing limits any significant gain for the AUDUSD pair.
In reality, the USD index (DXY), which monitors the greenback against a basket of currencies fell to a nearly four-month low on Wednesday amid dovish Federal Reserve (Fed) expectations.
Market players appear to believe that the US central bank will begin decreasing interest rates in September and drop borrowing costs again in December. This keeps US Treasury bond yields near a multi-month low, which, combined with the current risk-on atmosphere, continues to erode the safe-haven dollar. Furthermore, the release of monthly employment data from Australia aids the Australian Dollar pair’s small recovery from a two-week low retested in the Asian session.
Daily Market Movers: The Australian dollar fails to attract buyers after conflicting domestic jobs data.
The official figures provided by the Australian Bureau of Statistics (ABS) on Thursday showed that the unemployment rate In June, it increased to 4.1%, exceeding forecasts and surpassing the previous record of 4.0%.
A modest disappointment compensated by an unexpected increase in employment, from 39.7K in May to 50.2K in June, far exceeding consensus predictions of 20.0K.
The conflicting data, however, had little impact on expectations for the Reserve Bank of Australia’s next policy move, although providing a minor boost to the Australian Dollar and the Australian Dollar pair.
The US Dollar, on the other hand, finds some buyers and reverses some of the previous day’s severe losses, reaching a nearly four-month low, limiting the major’s gains.
Meanwhile, the Federal Reserve reduced interest rates in September. The reserve largely priced in, and investors expect two rate cuts by the end of the year, which should limit the USD’s gain.
