Today
saw the latest unemployment figures released for Australia and it was another
trend higher for the official unemployment rate, this time up to 5.8% from
5.7%. But what was surprising was that the economy added 21,000 jobs last month
which was much higher than the market expected.
A
rising unemployment rate, weak jobs growth and an Aussie Dollar over 0.90c is
only going to bring forward the chances of the RBA dropping interest rates or
intervening on the Aussie Dollar to bring it back down into the 0.80c range. If
the US Fed decides not to taper until February or March next year and the
Aussie Dollar is still over 0.90c I will predict an interest rate cut in the
month of February and an outright open intervention by the RBA which would mean
it selling some of its Aussie Dollar reserves to push the Aussie Dollar lower.
I encourage any trader with an open AUD short position to consider holding this
position (do not adjust your stop loss wider) until December 18th because if
the US Fed decides to taper the Aussie Dollar will likely fall further. If it
does it may do the job that the RBA is trying to do, but it will be a wait and
see game and I can't see any reason for the Aussie Dollar fundamentally to
trend back higher at least until after the US Fed decision on tapering. If it’s
“no taper”, the Aussie will find some buyers but if it’s “taper time” then the
sellers are likely to hit it hard.
RBA
Governor Stevens has said the RBA will consider an open intervention on the
Aussie Dollar and I think the RBA is firmly and absolutely committed to doing
what it takes to get the Aussie Dollar back below 0.90c and heading towards
0.80c. If the US Fed doesn't taper in December or January and the Aussie is
still over 0.90c look out for an open intervention. Remember, don’t fight
against what a Central Bank really wants, you will likely lose long term.
Each day +Andrew Barnett from +LTG GoldRock reviews the latest Forex news and provides the information to Members in the GoldRock Insider Report.
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