Aussie slides as Australia’s unemployment rate jumps

 

AUD/USD at more than three year low

The unexpected jump in Australia’s unemployment rate to 5.2% in April sent the Australian dollar tumbling versus the US dollar as AUD/USD fell through 0.69 to an intraday low of 0.6891, the lowest since January 2016. The uptick in the unemployment rate could be partly explained by an increase in the participation rate to 65.8% from 65.7% in March.

Other parts of the employment report were mixed. The headline change in jobs looked good, an addition of a net 28,400 jobs, but the details showed a loss of 6,300 full-time positions and an increase of 34.700 part-time ones.

 

AUD/USD Daily Chart

Source: OANDA fxTrade

 

Chances of an RBA cut increase

Overall, the report was taken negatively with the Aussie sliding across the board. Australian three-year bond yields dipped as much as 6bps as expectations rose that the softer jobs report could encourage the central bank to adopt a more dovish bias in its monetary policy. Rates markets pushed the probability of a rate cut at the June meeting to above 50% from 39% yesterday.

 

Equity markets embrace tariff delay

 

More housing data on tap

Today’s European data features the Euro-zone trade balance for March, with the surplus seen rising to EUR19.9 billion from EUR17.9 billion. I wonder what Mr. Trump might make of that? The North American session sees US housing starts and building permits for April along with the Philadelphia Fed manufacturing index. Bank of Canada chief Poloz is scheduled to speak along with Fed’s Brainard, Bank of England’s Haskell and ECB’s Coeure.

 

The full MarketPulse data calendar can be viewed at https://www.marketpulse.com/economic-events/

 

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.