The Australian unemployment rate has risen dramatically again – jumping 0.3 per cent higher from 7.1 per cent in May to 7.4 per cent in June – affecting 992,300 workers, according to the Australian Bureau of Statistics.
This fluctuation indicates that the fallout from the Covid-19 crisis is not yet over, with a surge in infections in the state of Victoria, in southeast Australia, further threatening the employment outlook, potentially prompting a need for more fiscal support to eradicate such a hit.
A worse situation could also happen as the unemployment rate is expected to touch eight per cent in the labour market in the last quarter of 2020 due to the continuity of the effects of the pandemic that could further stifle the nation’s economic growth.
Subsequently, investors could interpret Australia as a weakening economy and seek opportunities elsewhere, causing the Australian dollar to depreciate and lose its value when compared to the value of the US dollar.
Since June, the AUD/USD price (the value of the Australian dollar compared to the greenback) has been moving in a really tight range between 0.68 and 0.70, with the current price sitting at around 0.69.
Based on this premise, there is a good opportunity to have a short position on the AUD/USD as the Australian dollar looks bearish.
For more information on how to trade AUD/USD and other products, contact Golden FX Link Capital.