The Australian dollar dropped today after the report showed an unexpected decline of employment, making traders speculate about a possible interest rate cut by the Australian central bank.
Market participants expected an increase of Australian employment by 10,200. Alas, such hopes haven’t materialized. The Australian job market lost 29,300 in December, following the November decrease by 7,500 jobs. The unemployment rate in November was revised down by 0.1 percentage point to 5.2 percent and stayed at that level in December. The last year was the worst year since 1992 for Australia’s labor market.
The Aussie behaved similar to the New Zealand currency: reversed its gains versus the US dollar and the yen, while continued to fall against the euro. It’s not a surprise as fundamentals were also the same: positive overseas, but negative in the country itself. Nevertheless, market sentiment remained good, making it possible for the Australian dollar to rebound yet.
AUD/USD fell from 1.0426 to 1.0386 and AUD/JPY went down from 80.06 to 79.70 as of 6:35 GMT today. EUR/AUD was up from 1.2328 to 1.2376.
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