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AUD/USD Hits Resistance

H.S. Borji
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AUD/USD Hits Resistance

The Australian dollar backtracked against its US counterpart Thursday amid mixed Australian employment data and weaker than forecast Chinese trade figures.

The AUDUSD retreated from an intraday high of 0.9445 to settle at 0.9373, declining 0.4 percent. The pair, which traded steadily ahead of the employment report, faced stiff resistance at 0.9433. Initial support is likely found at 0.9389, which is below the 100-day simple moving average.

Meanwhile, the Aussie weakened further against its New Zealand counterpart, as the AUDNZD declined 0.24 percent to 1.0640. The pair has declined every day this week and has depreciated 0.7 percent since July 7. The pair is likely supported at 1.0640, with initial resistance found at 1.0697.

In economic data, Australian employment rose faster than forecast in June, although the number of full-time workers declined. The number of people employed in June increased 15,900 to 11.58 million, the Australian Bureau of Statistics reported today. That followed a decline of 5,100 the previous month.

Economists forecast a gain of 12,300 jobs last month.

However, the figures weren’t as impressive below the surface. Full-time employment declined 3,800 in June after surging 22,200 the previous month. Meanwhile, the number of people working part-time jobs increased 19,700.

The unemployment rate unexpectedly rose from 5.9 percent to 6 percent, a fresh 11-year high. The increase was due to higher participation levels and a faster rate of increase in the number of unemployed persons.

Compared to June 2013, the unemployment rate was 0.3 percentage points higher last month.

The Australian government expects the unemployment rate to keep rising until it reaches 6.25 percent, as the slowdown in mining investment and the Commonwealth budget weigh on the labour market.

The government’s latest budget seeks to trim Australia’s budget deficit in half over the next year through a combination of tax hikes and spending cuts.

The Reserve Bank of Australia, meanwhile, is keeping interest rates steady as it seeks a “period of stability” in order to achieved balanced growth.

In other data, Australian consumer inflation expectations for next year declined in June, from 4 percent to 3.8 percent, the Melbourne Institute reported.

Elsewhere, US consumer demand boosted Chinese exports in June, although the pace of growth disappointed forecasts. Chinese exports increased at an annual rate of 7.2 percent in June, following a gain of 7 percent the previous month, China’s National Bureau of Statistics reported Thursday.

Economists forecast a gain of more than 10 percent.

Imports increased 5.5 percent annually in June, following a decline of 1.6 percent the previous month.

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