The Australian economy gained only 3.7K jobs in October, significantly below the 18.9K that was expected. On the other hand, the previous figure was revised up from 19.8K to 26.6K, softening the blow.
The unemployment rate fell to 5.4%, beating expectations and standing at the lowest since February 2013, the best in over four and a half years. It is also the longest stretch of job gains since the 90s. But, the drop in the jobless rate is driven by a slide in the participation rate: 65.1% instead of 65.2% that was reported last time.
The composition of the jobs is more encouraging: 24.3K full-time positions were added in October, compensating for a loss of 20.7K part-time positions.
As we have already learned, the bigger problem is wages. Similar to other developed economies, wages and inflation are not playing along with higher inflation data. There is probably still some slack left in the Australian economy.
All in all, the report provides good and bad news alike. The initial reaction was a widening of the AUD/USD range: a low of 0.7567 to a high of 0.7607 around the publication. This 40-pip range did not last for too long and the pair returned to narrower ranges afterward.
When will the Australian dollar wake up? We did see some movements in the euro, yen, and pound this week, but the Aussie’s movements have been narrow.
Here are the recent moves on the Aussie/USD chart. Support awaits at 0.7560 and resistance is at 0.7625. The pair getting used to the narrow range but is not extending its falls.
More: AUD/USD bounces, but it is forming lower highs