Australian wages are not going anywhere fast. They advanced by 0.5% q/q in the third quarter, the same as in Q2 but lower than 0.7% expected. Year over year, salaries advanced by 2%, also below 2.2% that was predicted.
AUD/USD dropped to below the 0.76 level. The pair slipped to lower ground yesterday but managed to recover. This second blow is already more decisive.
Without wage rises, it is hard to see rising inflation, at least not core inflation. Weak CPI hit the Aussie a few weeks ago, and it never recovered.
This isn’t the only driver of the Aussie. Commodity prices are falling all over the world, and this includes the prices of copper and iron and that Australia exports. Needless to say, it isn’t good news for the A$. To add fuel to the fire, the Westpac Consumer Sentiment dropped by 1.7% after rising 3.6% beforehand.
The biggest event for the Aussie still awaits us: the jobs report. Will it be the final nail to send the Aussie even lower? Or will it allow the currency to recover?
More: Elliott Wave Analysis: AUDUSD and NZDUSD