THE TAKEAWAY: Australian labor market shows growth > RBA rate cut remains a possibility > AUD/USD Higher
The Australian Dollar edged higher against the US Dollar as the Australian economy added 10,300 jobs in June, beating expectations of a flat employment change. Part-time employment led the growth with 14,800 jobs while 4,400 full-time jobs were lost. The unemployment rate printed 5.7 percent over a revised 5.6 percent previously but was in line with expectations of a one percent increase. This rise could be an indication of improving confidence in the labor market, leading more people to begin searching for jobs.
Whether this improvement will compel the Reserve Bank of Australia to change their monetary policy remains unclear. However, Credit Suisse’s gauge on market priced-in outlook remained unchanged, showing investors still expect a 60% chance for an interest rate cut at the next meeting RBA meeting. A rate cut to support economic growth could reduce the Aussie’s appeal to yield-seeking investors and move the pair lower.
AUD/USD (5-Minute Chart)
Source: FXCM Marketscope
--Jimmy Yang, DailyFX Research Team