- AUD/USD declines after Australia’s jobs report crossed the wires
- The economy lost 3.9k employees instead of the 15k gain projected
- Impact unlikely to spur the Reserve Bank of Australia into action
The Australian Dollar sank lower against its US counterpart after disappointing jobs data crossed the wires. The data showed that the Australian economy lost 3,900 jobs in August, which is substantially worse than the 15,000 gain that economists expected. August’s unemployment rate fell to 5.6 percent compared to 5.7 percent expected and 5.7 percent in July, while the labor force participation rate decreased to 64.7 percent compared to the 64.9 percent increase estimated.
Although there was a mild market reaction after the jobs data was published, the move appeared to be relatively restrained and momentum swiftly fizzled. This may reflect the results’ limited impact on RBA policy expectations. Indeed, DailyFX Currency Strategist Ilya Spivak argued that the RBA has already signaled a firm wait-and-see posture for now. Tellingly, front-end bond yields did not follow the currency lower in the immediate aftermath of the release.