Aussie Dollar's Failure To Hold 77 Cents Will Worry The Bulls

 | Feb 17, 2017 10:29

Originally published by AxiTrader h2 Key takeaway/h2

To the disappointment of many, but the surprise of few the Australian dollar was unable to hold above 77 cents in the past 24 hours.

That was despite a weaker US dollar which lost significant ground against the euro, yen, and Swiss franc. But context is everything. So it is worth noting the AUDUSD fall of 0.18% over the past 24 hours is consistent with a similar move in the Kiwi, and a very small dip for the Canadian dollar. And the Aussie outperformed EM currencies like the real, the ruble, and the rand.

So this is less about the graveyard of Aussie bulls above 77 cents and more about the US dollar, and rotation within currency markets.

h2 What You Need To Know/h2

The AUD/USD really needed a strong employment number yesterday to kick it up and sustainably through the 0.7720 level. Sure it did get up there briefly making a high in the wake of the jobs data of 0.7732ish but the data was only a marginal headline beat and contained so disturbing details which made it look softer than the headline number.

In summary the 5.7% unemployment print was positive, as was the 13,500 rise in total employment. But the 44,800 fall in full-time employment worried folks as it speaks to ongoing spare capacity in the Australian jobs market. Hours worked in the month actually increased by 10.2 million however.

As I wrote in my overnight wrap, not for a moment do I believe that 44,800 full-time jobs were actually lost. But the data we have is the data we have and while the ABS reports rubbery numbers like this traders have no option but to trade them. So the Aussie is lower this morning at 0.7694.

Structurally though there is a longer term sign that the unemployment rate is what traders, and global investors, look to and recall once the smoke and fury of the jobs data has gone.