The Australian dollar sank this week, reaching a new multi-year low versus its US counterpart, as a very poor employment report reignited talks about a potential interest rate cut by the Australian central bank.
Market participants were expecting decent jobs growth in Australia ahead of the government data. This made the actual report just more disappointing as it demonstrated a huge drop. It is likely that the Reserve Bank of Australia will consider additional monetary stimulus after the unfavorable data.
The Aussie was weak against all major currencies, but especially against the greenback, which was particularly strong because of favorable domestic fundamentals. AUD/USD dropped as much as 2.5 percent over the week.
AUD/USD tumbled from 0.8996 to 0.8771 after rising to the weekly high of 0.9085. AUD/JPY sank from 93.54 to 91.46, while EUR/AUD advanced from 1.5199 to 1.5418.
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