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Unemployment Rate pressurizes Aussie

Jul 16, 2020 05:30

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As per Official data released on early Thursday, Australia’s unemployment rate rose to 7.4% in June to hit the highest level in two decades whereas Market consensus favors Employment Change to recover to +112.5K from -227.7K. The effective rate factors in people working zero hours and those who have dropped out of the labor force as per senior government figures, is more likely to be 13.3%.

However, Prime Minister Scott Morrison thinks the real situation in the labor market is worse than what official data shows.

“The effective rate of unemployment is likely to be far higher than illustrated in these numbers and the treasurer and I and the employment minister, have not been shy about pointing to that fact,” Mr. Morrison told reporters in Canberra on Thursday.

Australia’s consumer confidence index fell to -6.1% in July which was published by Westpac, almost entirely reversing the 6.1% rise seen in June. Confidence seems to fall among investors in response to the rise in the number of corona virus cases in Australia

Moderna and US President Donald Trump, Oxford Scientists, and US health official Fauci also suggest that the vaccine for the deadly virus will be out soon. Also to be noted that President Trump on Tuesday signed a bipartisan bill into law, sanctioning Chinese officials who undermine the rights to free speech and assembly in Hong Kong. AUD may come under more pressure if the Sino-US tension continues.

AUD/USD 4 Hour Chart:

Support: 0.6972 (S1), 0.6936 (S2), 0.6903 (S3).

Resistance: 0.7040 (R1), 0.7073 (R2), 0.7109 (R3).

Amid all the catalysts putting pressure on Aussie, we expect a bearish trend for AUD/USD.

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