The Australian has recorded sharp losses in the Thursday session. In North American trade, AUD/USD is trading at 0.7066, down 1.33% on the day.
Aussie slides on weak employment data
It’s been a rough week for the Australian dollar, which is down 2.2%. The currency has fallen 1.2% on Thursday, its worst one-day performance since late September. The catalyst for the sharp drop was that total employment fell by 29.5 thousand, its first decline in four months. Although the reading managed to beat the estimate of -38.0 thousand, investors are clearly concerned about the economic implications of the lockdown restrictions in Victoria State, and a loss in jobs created has soured sentiment towards the Aussie. The unemployment rate didn’t help matters, as it rose slightly, from 6.8% to 6.9 per cent.
On the inflation front, there was better news. MI Inflation Expectations, which helps track actual inflation levels, rose to 3.4% in September, up from 3.1%. This was the indicator’s highest gain since April, when Covid-19 began to take a toll on the economy.
China inflation slips
The Australian dollar is sensitive to key Chinese releases, and the September CPI reading only compounded matters for the struggling Aussie. Inflation continues to slow in China and fell to 1.7%, down sharply from the previous release of 2.4%. This weak reading missed the estimate of 1.9%, and is a far cry from January’s robust reading of 5.4%.
AUD/USD Technical
- There is resistance at 0.7144, followed by resistance at 0.7234
- The next line of support is 0.7046. This line has weakened as AUD/USD is down sharply on Thursday. This is followed by support at 0.6997
- AUD/USD has broken below the 50-day MA, which signals a downtrend for the pair
