By guest contributor Stuart Talman, Director of Australian Sales, XE.com.
For the 5th consecutive week, the Aussie dollar closed in the 0.7400 to 0.7450 region as a thunderous local jobs report failed to push AUDUSD higher to 75 US cents.
With 50,900 new jobs added to the Australian economy for the month of June, this far exceeded expectations of 17,000 new jobs, adding to the backdrop of recent Australian economic data outperforming expectations. Despite this run, the Aussie continues to be weighed down by ongoing trade tensions and Trump/China headlines.
73 US cents remains the key downside level for AUDUSD, tenuously offering ongoing support over the past few weeks. A break below this level would likely position the Aussie dollar for a test of sub 70 US cent levels before year end.
Immediately following Thursday morning’s impressive job’s growth number and a climb to weekly highs just north of 0.7440, the back end of the week was punctuated by see-sawing price action as both the high and the low of the week were achieved within 24 hours.
Price action whipsawed as the Chinese Yuan made fresh YTD lows against the USD driving the Aussie over 1.50% lower off its post-employment data highs, only for these losses to be paired on the back of Trump’s comments in a CNBC interview.
Trump commented that the strong US dollar “puts us at a disadvantage” adding that the “Chinese currency is dropping like a rock.” Also voicing his displeasure for the Fed, heaping criticism on the U.S. central bank for raising interest rates amid increased financial tensions between the U.S. and its key economic partners.