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.
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.