Aussie slides as Australia’s unemployment rate jumps

May 16 04:05 2019 Print This Article

 

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.

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