Australia reported a rather disappointing economic report today covering its labor market. This sent the Australian currency, the Australian Dollar, to its biggest one day correction in over three months as it plunged below the 0.9000 level once again. The current correction has paused as forex traders reevaluate their positions and seek trading opportunities in the Australian Dollar.
The Australian currency was in a bullish trend as positive economic data out China yesterday boosted hopes that demand for commodities will increase which would be a positive for the Australian economy and the Australian Dollar. Positive economic data out of Australia added to the bullish move which first was evident after the Reserve Bank of Australia sounded a more hawkish tone on the Australian currency.
The bullish rally was today interrupted as Australia reported a loss of 3,700 jobs in January. Economists called for the creation of 15,000 jobs. December’s employment report saw a downward revision as that month now shows a loss of 23,000 jobs. Full-time job losses were 7,100 in January and December was revised lower to show a job loss of 32,100. Part-time employment rose 3,400 and December was revised higher to show a gain of 9,100 jobs.
The unemployment rate increase to 6.0% and the labor participation rate decreased to 64.5% which is the same as December’s rate after it was revised lower today. This is very troubling news out of the Australian labor market which explains the sharp drop in the Australian Dollar today.
What should forex traders expect from the AUDUSD?
The US will release a very important economic report today, the advanced retail sales report, which can push the AUDUSD back above the 0.9000 level should the retail sales report disappoint forex traders. A positive surprise would send the AUDUSD below 0.8900 as it will add to the weakness of the Australian Dollar with a US Dollar rally.
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