Australian Dollar (AUD) Currency Update: ‘Aussie’ falls as Joblessness Climbs
After gaining earlier in the week as Chinese trade figures exceeded expectations, the Australian Dollar went on to reverse advances against peers like the US Dollar and Pound.
If you're looking to make an international money transfer, we recommend TorFX.
The ‘Aussie’ posted widespread declines during Australasian trading as the odds of the Reserve Bank of Australia issuing a further rate cut this year rose in response to disappointing employment figures.
Economists had forecast that the Australian unemployment rate would edge up from 5.8 per cent to 5.9 per cent in January, but it actually hit 6.0 per cent and its highest level for ten years. Instead of adding the 15,000 positions expected last month the Australian economy shed 3,700 jobs.
December’s employment decline was negatively revised to 23,000.
The concerning result pushed the AUD/NZD pairing to a two-week low and saw the ‘Aussie’ extend declines against Sterling.
Although the US Dollar was feeling the pressure ahead of the release of US advance retail sales data, the ‘Aussie’ also softened against its North American counterpart. However, some industry experts have argued that the employment data is unlikely to cause the Reserve Bank of Australia to revise its newly hawkish stance.
In the opinion of analyst David Ferranti; ‘The continued deterioration in the labour market is one the Reserve Bank had been expecting, meaning today’s figures may do little to change the stable interest rate outlook provided by the central bank. This comes as improvements in leading economic indicators like business sentiment suggest that the bank’s record low interest rates are filtering through to the broader economy.’
In other currency news, the Pound rallied against the US Dollar as optimism surrounding the UK’s economic recovery led to investors betting that interest rates will begin rising next year.
Meanwhile, after declining yesterday in response to an ECB official inferring that negative interest rates were being ‘seriously’ considered, the Euro recovered ground on Thursday.
The common currency was little-affected by the European Central Bank’s monthly report even though it detailed the expectation that inflation in the currency bloc will remain below target for the next few years.
The Australian Dollar is currently trading against the US Dollar in the region of 0.8960 and trading against the Pound in the region of 0.5383.