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The dollar got hit by a one-two punch of ruckus in the White House and a less hawkish Fed while the Aussie failed to get momentum from Australia’s weak jobs data.

  • NZ PPI input (q/q) up by 1.4% vs. 0.9% expected, 0.8% previous
  • NZ PPI input (q/q) up by 1.4% vs. 0.9% expected, 0.8% previous
  • Japan’s trade surplus inches up from 0.09T JPY to 0.34T JPY in July
  • AU unemployment rate dips from upwardly revised 5.7% to 5.6%
  • AU adds net of 27,900 jobs in July vs. 20,000 addition in June

Major Events/Reports:

Australia’s jobs report

Unemployment rate in Australia might have dipped lower in July, but the details aren’t as rosy as headline numbers suggest.

For starters, the unemployment rate edged down to 5.6%, but only because June’s rate was revised higher from 5.6% to 5.7%. Fortunately, the net jobs created in June was also revised higher from 14,000 to 20,000.

A net of 27,900 workers had also found jobs in July, which should be a good thing if not for the fact that a net of 20,300 full-time workers had lost their positions while part-time jobs increased by 48,200. Remember that full-time work is preferable to part-time ones, as they represent better consumer spending prospects.

Last but not the least is the monthly hours worked for all jobs, which fell by 0.8% for the month. The only silver lining was the labour force participation rate hitting an 18-month high of 65.1% but even that was iffy. See, the number of unemployed persons looking for full-time work actually fell by 3,800 while unemployed persons only looking for part-time work rose 4,900.

Overall the details don’t look good for the RBA, which is already worried that workers taking on jobs won’t translate to higher inflation down the road.

Today’s release is even gloomier when you consider yesterday’s quarterly wage price release which showed wages rising at a record-low pace. This is probably why the Aussie failed to find momentum after Australia printed the report.

Dollar’s selloff extended

The Greenback extended its losses against its major counterparts as Asian session traders price in the double whammy of trouble in the White House AND a less-hawkish-than-expected FOMC meeting minutes.

In yesterday’s drama episode trading session, Trump’s decision to disband his Manufacturing Council and Strategy & Policy Committees questioned the administration’s ability to move forward with its fiscal stimulus plans.

The Fed’s latest FOMC meeting minutes didn’t help, either. While members still sound game with reducing their balance sheet next month, a good number of them are now less confident that they’ll see 2.0% inflation target on schedule.

Major Market Mover(s):

USD

The scrilla got one-two punched by its major counterparts and was dragged lower across the board.

EUR/USD is up by 11 pips (+0.09%) to 1.1779
USD/JPY is down by 34 pips (-0.31%) to 109.88
GBP/USD is up by 21 pips (+0.16%) to 1.2906, and
USD/CHF is down by 11 pips (-0.11%) to .9644.

AUD

The Aussie got a boost from strong headline jobs numbers, but the good vibes soon petered out when traders took a closer look at the report’s details.

AUD/USD is only up by 6 pips (+0.08%) to .7936,
AUD/JPY hit a low of 87.01 before recovering to 87.19,
GBP/AUD is down by 13 pips (-0.08%) to 1.6262, and
AUD/NZD is down by 17 pips (-0.16%) to 1.0830.

Watch Out For:

  • 9:30 am GMT: U.K. prints its retail sales report. Read Forex Gump’s trading guide to see what you should expect!
  • 10:00 am GMT: Euro Zone’s final CPI (y/y) to remain at 1.3%
  • 10:00 am GMT: Euro Zone’s final core CPI (y/y) to stay at 1.2%?
  • 10:00 am GMT: Euro Zone’s trade balance (20.4B EUR expected, 19.7B EUR previous)