Australian July Unemployment Rate arrives at 7.5% vs. expected 7.8%

The Australian job report has been released as follows, lifting the Aussie on the better than expected jobs numbers, passing 0.7180.

Aussie jobs data

• AUSTRALIA JULY EMPLOYMENT +114.7K S/ADJ (REUTERS POLL: +40.0K)
• 12-Aug-2020 19:30:01 - AUSTRALIA JULY UNEMPLOYMENT RATE +7.5 PCT, S/ADJ (REUTERS POLL: +7.8)
• 12-Aug-2020 19:30:01 - AUSTRALIA JULY FULL TIME EMPLOYMENT +43.5K S/ADJ
• 12-Aug-2020 19:30:01 - AUSTRALIA JULY PARTICIPATION RATE +64.7 PCT, S/ADJ (REUTERS POLL: +64.4 PCT)

Westpac analysts, ahead of the release, explained that after a substantial jump in employment in June of 210.8k, the recovery should continue in July at a slower pace.

Westpac and the market expected increases of 40k and 30k respectively.

Rising participation should drive unemployment higher from 7.4% to 7.8%, which would be a high since 1998.

AUD/USD implications

Meanwhile, Australia’s economic recovery will be slowed notably by the Victorian virus resurgence.

Stage 4 restrictions will weigh on the participation rate and leave the unemployment level elevated. 

How much this hurts A$ is an open question, with the RBA consistently pushing back against further easing steps such as negative interest rates. China’s industrial sector rebound also continues to underpin Australia’s resources-driven trade surpluses,

analysts at Westpac argued.

The AUD is the commodity currency which means it is bearing the biggest risk of a correction in the case of further escalation in US-China tensions...

More to come...