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Australian Employment drops unexpectedly

Posted by Akhilesh Ganti on Aug 7, 2013 9:50:00 PM

AU employment 080713
Australia's July employment data posted a -10.2K (chart on left) as weaker demand discouraged hiring. The market had been expecting a +5k increase in the number of people employed. The unemployment rate dipped to +5.7% (chart on right) though that was probably a reflection of the drop in the participation rate.

The RBA had reduced the overnight cash rate target by 225bp since late 2011 to a record low of 2.5%, including a quarter point cut a few days ago to offset the deleterious effect on economic growth that the slowdown in mining investment was having. The Aussie, which had been trading around 0.9025, fell to 0.8970 before stabilizing a bit.

{charts:Bloomberg}(click to enlarge)

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