The strong Australian July employment data may prove something of a headache for the Reserve Bank of Australia. Strong gains in full-time employment look likely to delay the RBA from tumbling into full easing mood as already seen in New Zealand and will probably be seen by the Fed in September, ING’s FX strategist Chris Turner notes.

One-month target is at 0.68 for AUD/USD

“This should imply that the Australian Dollar (AUD) does well on the crosses. The early August tumble in AUD/NZD suggests that investors had liked this cross to trade higher, but yen-triggered deleveraging forced the unwind. We can now see this cross retesting the 1.1150 highs from mid-July.”

“Equally, if the Fed is to cut in September and the US yield curve to steepen further, EUR/AUD should come lower. But it may well be that macro weakness in China is holding the AUD back here. Overall, a one-month target is at 0.68 for AUD/USD.”