07.05.2015 - The situation on the labor market in Australia has led to a drop in the Australian dollar

In April, the employment rate in Australia fell by 2.9 thousand, against an expected growth by 4.5 thousand. At the same time the unemployment rate rose by 0.1% to 6.2%, in line with analysts' forecasts. The situation on the labor market has a strong influence on consumer spending in the country. At the same time, the recent rise of the Australian dollar was caused by the statement of representatives of the Reserve Bank of Australia on the positive effect of lower interest rates. Rising prices for an iron ore has also supported the Australian currency. Despite this, we believe AUD/USD to be overvalued and recommend to open short positions with the target of falling to 0.7550.

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