AUD/USD Under Pressure After Mixed Australian Jobs & Chinese GDP Data
AUD/USD, Chinese GDP, Australian Jobs Talking Points:
- Australian jobs data beats on headline figure, but increased hours reflects NSW lockdowns
- AUD/USD may look to test 0.7500 as Fed Chair Jerome Powell says easy policy is here to stay
- Chinese GDP shows YoY decline, however QoQ data surpasses consensus estimates
Australian jobs data came back mixed on Thursday morning as the country struggles with coronavirus lockdowns. The employment change for June came across at 29.1k jobs added, beating the consensus 20k forecast. These job gains helped lower the country’s unemployment rate from 5.1% to 4.9%. Of particular note is the decline in monthly hours worked, tallying -33 million. This is likely the result of numerous lockdowns as a result of Covid variants spreading around multiple metro areas. The mixed bag of data will present a headache to market participants as AUD/USD continues to come under pressure as the fundamental outlook deteriorates in Australia.
Australian Jobs Data
Courtesy of Australian Bureau of Statistics
AUD/USD appears to have bucked its recent downtrend following renewed Greenback strength stemming from the June FOMC meeting. The pair found support at the September 2020 swing high and has consolidated in a range between that previous swing high and the 0.50 Fibonacci level at 0.7500. With Fed Chair Jerome Powell indicating on Wednesday that accommodative monetary policy is going nowhere anytime soon, AUD/USD may look to retake 0.7500 on the back of Greenback weakness. Virus-related fears will continue to weigh on sentiment, however, as territorial restrictions added to the Aussie’s June decline. Should the pair break back above 0.7500, resistance may be found with the 0.618 Fibonacci level around 0.7620.
AUD/USD Daily Chart
Chart created with TradingView
Chinese GDP data came back mixed on Thursday, as market participants were no doubt following closely after recent commentary and policy action out of Beijing. While year-over-year growth missed estimates at 7.9%, quarter-over-quarter data and retail sales data both surpassed expectations. Despite beating expectations both prints fell short of previous readings, further highlighting worries that the Chinese economy may be slowing down.Also beating expectations was industrial production, coming in at 8.3% growth YoY vs. a consensus estimate of 7.8%.
Courtesy of the DailyFX Economic Calendar
Thursday’s GDP print comes as fears increase globally over a potential slowdown in the Chinese economy. In what may be a warning sign to the global community, the People’s Bank of China (PBOC) slashed reserve requirements by 0.5% in an effort to stimulate domestic lending. As most developed economies look set to unwind pandemic stimulus programs, China is stepping back in to ease monetary conditions. Market participants may find it worrying that if China is beginning to slow down, the global economy may not be in for as long of a “post-pandemic boom” as predicted. Slower growth in the Chinese economy may weigh on sentiment of market participants globally, as investors see firsthand the impact of base effects washing out of economic calculations.
--- Written by Brendan Fagan, Intern for DailyFX
To contact Brendan, use the comments section below or @BrendanFaganFX on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.