PAIN index shows more strife ahead for Aussie

The US non-farm payrolls report should be the main market driver on Friday.

Consensus estimates are for a net 184,000 jobs to have been created in July and the unemployment rate to drop from 7.6 to 7.5 per cent.

The "whisper number" among traders is creeping higher, however, after solid private sector jobs growth was revealed on Wednesday.

In the recent past, a better piece of US economic news might be expected to boost "commodity currencies" such as the Australian dollar.

If only the Aussie could rely on that correlation right now.

This week it "closed" below $0.90 for the first time in nearly three years.

Not even the Aussie's positive relationship with perceptions of China's economic health has survived during its latest downturn, which came after the Reserve Bank of Australia said it thought interest rates would fall further.

The Citi FX PAIN index aims to reflect crowded market conditions in currencies, where a reading of minus 100 suggests active traders hold substantial short positions versus the buck.

Though near lows, Citi notes the Aussie's PAIN suggests there remains "significant further selling capacity".

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