The Aussie remained range bound against the greenback yesterday despite solid employment data for June. Notably, the US unemployment claims were also slightly higher than anticipated. The gloomy economic outlook continues to keep the market away from commodity currencies such as the Aussie. Overall, the AUD/USD pair traded in a narrow range between 0.6680 and 0.6780.
According to the data published by the Australian Bureau of Statistics, the country’s economy added 88,400 jobs in June, following an addition of 60,600 jobs in the prior month, and delighted economists who were expecting a drop in the job additions of 30,000.
At the end of June, total employment stood at 13,599,300, reflecting a 4.60% (or 597,100) increase from March 2020. Consequently, the unemployment rate fell to 3.50% in June, from 3.90% in the previous month, and surpassed the 3.80% jobless rate forecast by economists.
At the end of June 2022, the jobless rate stood 1.70% below its March 2020 level. In June, the number of unemployed people fell by 54,300 to 493,900. Specifically, the youth unemployment rate declined to 7.90%.
Full-time employment rose by 52,900 to 9,496,300. Likewise, part-time employment increased by 35,500 to 4,103,000. The employment-to-population ratio inched higher to 64.40% in June. Also, the participation rate inched up 0.10% to 66.80%.
The underemployment rate grew by 0.3% to 6.10%, while the underutilization rate stood almost unaltered at 6.90%. According to the data published by the US Bureau of Labor Statistics, the country’s producer price index (PPI) rose by 1.10% m-o-m in June, following an increase of 0.90% in the prior month and higher than the 0.80% rise anticipated by economists.
Almost 75% of the PPI increase in June was contributed by a 2.40% rise in prices for final demand goods. Also, the index for final demand services was up by 0.40%. On a y-o-y basis, the PPI surged 11.30% in June 2022, reflecting the steepest rise since a record jump of 11.60% in March 2022.
Excluding food, energy, and trade services, the US core PPI inched up 0.30% m-o-m in June, following a 0.40% rise in May, but missed the 0.50% increase anticipated by economists. On a y-o-y basis, the US core PPI jumped 6.40% in June 2022.
The US first-time unemployment claims increased to 244,000 in the week ended July 9, from 235,000 in the prior week, as per the data published by the Department of Labor. Economists anticipated the unemployment claims to remain almost unaltered from the prior week’s count of 235,000.
The four-week moving average was 235,750, up 3,250 from the earlier week’s level of 232,500. The solid employment data from Australia and slightly higher US unemployment claims, coupled with a gloomy global economic outlook, are expected to keep the AUD/USD pair range-bound in the short to medium term.
Technically, the AUD/USD pair is descending after facing resistance at 0.6870. The next support is anticipated at only 0.6580. Additionally, the currency pair is trading below its 50-day moving average while the momentum indicator is trending downwards. Therefore, we are anticipating the currency pair to remain in a downtrend for the short term.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
