It was reported on 7 November 2013 that the Aussie had taken a significant hit after the release of the country?s job numbers for the month of October. The figures showed that the economy had lost nearly 27,900 full time jobs, a sharp contrast from the growth that it had experienced earlier in the year. As a result, the AUD is reported to have lost out to all of its rivals in the 16 major currencies that it trades against.
Analysts note that this reduction in the workforce is the largest in over a year, with the previous being June of 2012. That said, the overall level of unemployment stayed steady from the numbers issued in October.
Many experts believe that this trend of cuts to jobs will likely continue into the near term. In remarks made recently by Reserve Bank Governor Glenn Stevens, he cited increased employment volatility due in large part to the shrinkage of the mining industry.
Analysts believe that the effects of the Australian job loss will likely have an additional impact on the course of the monetary policy decision making process. One area that will likely feel this is that of the interest rate, since the government will likely be disinclined to make any cuts until the employment situation settles out.
Traders are advised to watch for further volatility for the Aussie in trading throughout the coming weeks.
US and Canada to Release Employment Statistics
The two major North American countries are set to issue their jobs numbers tomorrow for the month of October 2013. At this time, many experts believe that the overall unemployment rate for both economies may rise slightly due to a perceived failure to add a sufficient number of jobs.
The American reports will cover both the Non-Farm Payrolls as well as the Unemployment Rate. Readers are reminded of the value of the NFP as it provides a more stable and reliable report since it removes agricultural hiring which is highly susceptible to seasonal fluctuations. For their part, the Canadians will issue their Unemployment Rate report along with the Net Change in Employment.
Analysts note that while both countries are believed to have added jobs, the numbers will likely show drop in the previous rate of growth. As was reported last month, the US fell far below its previous rate of job creation, causing shockwaves in the economy and hurting the dollar. As such, many experts have placed their predictions on the US growth fairly low.
In Canada, analysts believe that the falling crude prices are likely in part to blame for the loss of jobs. Prices for the fuel have fallen off in recent weeks as many in the market believe that the US stockpiles are at more than sufficient levels, thus lowering the demand. Readers are reminded that the health of the Canadian economy is often tied to the price of crude as it is their most significant export.
Analysts believe that both the USD and the loonie will face volatility in trading both in the lead up and following the release of the jobs numbers. Moreover, some traders may decide to move their investments into haven assets like gold, which may see a rise in its value over the course of the next week or so.
University of Michigan Confidence Report Due Out Friday
The highly valued University of Michigan Consumer Confidence report is due to come out tomorrow 8 November 2013. The report will relate to the month of November 2013. At this time, many experts believe that the report will show a slight rise in the level of confidence among American consumers.
Analysts remind readers that the Michigan report is closely watched by experts due to the fact that it has a much faster turn around period than the official government issued report, thus providing observers with a more timely picture of the state of the economy at this time.
Despite the belief by many experts that the confidence levels will rise in this month?s report, analysts suspect that should the Non-Farm Payrolls report show stunted growth in the employment sector, it may serve to depress the figures.