AUDUSD Breaks 18-Month Low; ADP Payroll Short

by on June 6, 2013 2:18 am BST

Australian trade balance figures came out at 9:30PM EST, and they disappoint adding to the already apparent signs of weakness. A trade balance of .03B was posted opposed to estimates of .20B (previous trade balance was revised up to .56B). As Australia’s economy slows the most it has in two years, the Australian dollar has taking a wallop and broke through .95 – the lowest level in nearly 18-months.

AUDUSD has been rather range bound and taking round trips from .995 and .97, and than back again. For range traders, the pips were for the taking. However, momentum traders found it harder when the pair would take off and run out of gas early on. Within early hours of the Asian trading session, the troubled pair fell below the .95 mark and may build momentum to fall lower as it reaches it’s lowest point in 18-months. A bearish out look is still given, and breaking the low adds confirmation to .

The U.S. had it’s fair share of disappointing news as ADP Non-Farm Employment fall below expectations indicating a gain of only 135k jobs against the 171k forecast. This was the second worst jobs figure in eight months. Carlos A. Rodriguez, CEO and president of ADP, said”U.S. private sector employment increased by 135,000 jobs during the month of May 2013, a slight increase over the previous month of April. The majority of new jobs in May came from the service-providing sector, which added a total of 138,000 jobs, while the goods-producing sector recorded a loss of 3,000 jobs. Notably, a gain of 5,000 jobs in the construction industry during May was offset by a decline of 6,000 lost jobs in the manufacturing industry.”

Employment Trends

Employment Trends Provided by ZeroHedge

However, the ISM Non-Manufacturing report squeaked above estimates by .6 percent. Anthony Neives, chair of the Institute of Supply Management, broke it down in the report:

“The New Orders Index increased by 1.5 percentage points to 56 percent, and the Employment Index decreased 1.9 percentage points to 50.1 percent, indicating growth in employment for the 10th consecutive month. The Prices Index decreased 0.1 percentage point to 51.1 percent, indicating prices increased at a slower rate in May when compared to April. According to the NMI™, 13 non-manufacturing industries reported growth in May. The majority of respondents’ comments are optimistic about business conditions. However, there is a degree of uncertainty about the long-term outlook.”

ISM Non-Manufacturing Breakdown

ISM Non-Manufacturing Breakdown