AUD/USD - page 5
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Bearish on the pair.
Where have the jobs gone? Australians grapple with less work, low pay
Sydney resident Raman Kumar recently lost his job as an electrician after his employer outsourced a big chunk of the work to China to slash costs - and then hired him back as a casual worker.
In June, the 40-year old signed up as a driver for ride sharing app Uber to help make ends meet, becoming part of the so-called "gig economy," where workers have greater flexibility but less security with more part-time or casual jobs.
While the unemployment rate in Australia has been relatively stable, at 5.7 percent in July, there is a historically high underemployment rate - people who want to work more - of 8.5 percent.
Combined, the measures lead to an underutilisation rate of 14.2 percent, much higher than during the global financial crisis and a worrying trend for the Reserve Bank of Australia (RBA).
That spare capacity in the labor market limits the ability of workers to push for pay rises, and feeds through to muted demand and confidence. If this trend persists, the RBA could be forced to lower rates again after already easing twice this year.
Indeed, wages growth is already at record lows while inflation is likely to remain below the central bank's target band of 2-3 percent until 2018.
"For that to turn around you need to see a pick-up in domestic demand," said Gareth Aird, senior economist at Commonwealth Bank.
"We have cash rates down to 1.5 percent and we're still not seeing a pick-up in wages or inflation. We probably need to see a pick-up in investment in order to see full-time employment materially lift."
For policymakers - unable to do much in the face of slow global demand - the low business investment is a particularly worrying phenomenon, especially as the end of the mining boom and a slowdown in major trading partner China leave corporate managers leery about spending on new projects.
Indeed, latest data showed business investment tumbled in the June quarter as miners continued to cut back while spending plans slipped 9 percent.
None of this would have been lost on the RBA, which highlighted "considerable uncertainty" in the labor market when cutting rates in August.
And so while more workers in the "sharing" or "gig" economy may sound like good news, it may not be a positive economic trend if they have lost the security of full-time employment.
"I wasn't prepared for this," said Kumar, who lives in Sydney's western suburbs and is saving to pay off his mortgage. "Everyone likes to be in a permanent job. There is more stability."
The rise in the number of part-time employees as a percentage of Australia's workforce is not a new phenomenon, but the pace has quickened in the past year and coincides with a fall in full-time jobs growth - a trend that could put the RBA in a tight spot.
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Right now, I can’t see the entrance for opening a deal on the asset, so I’ll wait until the price reaches one of the levels, and then I’ll make a decision.
I agree, it's too early to open a new trade yet, the pair's consolidating.
I think that AUD/USD asset will go down.
Australian dollar facing a Trump dump if he wins
Analysts at the Commonwealth Bank say the AUD could fall up to 10% if Trump wins the presidency