US Dollar Continues to Edge Lower

The Australian jobs report released earlier today saw the unemployment rate stay put at 6.20%, matching the median consensus estimates. The unemployment change saw the number of jobs declining by over 5000, marking the first decline in jobs growth since April of this year. A major chunk of the declines came from full time workers who in total lost 13,900 jobs in the month of September. Pervasive weakness in the commodity sector which has led to a wave of consolidations and layoffs remains a key concern for policymakers as they seek to keep unemployment low and growth sustained. The AUSDUSD currency pair posted a session high of 0.7350 on the news before pulling back lower. Resistance is identified at 0.7348 and a decline back towards 0.7190 is possible, which marks the breakout from the longer-term falling trend-line.

Retail sales numbers in the US declined more than expected as consumers preferred to hold on to the savings from low fuel prices. The cooling off in consumer spending raises questions on weakening demand domestically on the backdrop of weak global trade. The retail sales numbers is also likely to put the third quarter GDP figure on weaker footing compared to the spectacular 3.90% GDP growth print seen in the second quarter. The US producer price index also decreased -0.50%, posting one of the steepest declines since January of this year. Weak PPI is likely to keep inflation subdued in the coming months. The Greenback declined strongly on the news as most of its peers and risk assets continued to rally. The most noticeable gains came from the NZD which surged nearly 2.19%, closing at a 14-week high.