Australian dollar slips after jobs data

The Australian dollar was lower today after data showing unemployment rose in July, even as employment grew strongly.

The Australian dollar was lower today after data showing unemployment rose in July, even as employment grew strongly.

The Australian dollar was trading at US73.27c around 5pm, down from US73.51c late yesterday.

The Australian Bureau of Statistics reported that the jobless rate rose to 6.3 per cent in July, from 6.1 per cent in June. And yet the number of people in employment jumped by 38,500, a much bigger figure than economists were expecting.

Despite the pace of job creation now running at its fastest in four years, unemployment still appears to be trending higher.

Economists said the mismatch could be explained, in part, by a big rise in the number of people actively seeking work in July.

The workforce participation rate, as it is called, climbed to 65.1 per cent, from 64.8 per cent in June, the bureau’s figures show.

Still, the Reserve Bank would want greater clarity on the job market before it could confidently make policy changes, traders said.

The RBA will publish forecast for growth, inflation and unemployment today.

But bigger factors loomed for the currency, such as interest rate increases in the US, traders said.

Matt Simpson, senior market analyst at online trader ThinkForex, said that with commodities in a secular bear trend and the greenback likely to strengthen further with any hawkish comments from US Federal Reserve, the “RBA’s monetary policy is likely to become less of a driving for the Australian dollar in the weeks ahead”.