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Dollar Drops; Aussie Rallies On Strong Job Data

5/17/2018, 11:40:27 AMBasics of Trading
Dollar Drops; Aussie Rallies On Strong Job Data

The dollar slipped against the other major currencies in Asia on Thursday morning after climbing to this year’s high overnight. Australia’s strong employment data was in the focus in the morning, feeding the momentum for the Aussie.

The U.S. dollar index that tracks the greenback against a basket of six major currencies last stood at 93.06, down 0.21% at 11:16AM ET (03:16 GMT). 

Boosted by the better-than-expected building permits released on Wednesday evening, the greenback reached 93.50 overnight - a fresh new high for this year. A key indicator of demand in the housing market, building permits came in 1.352 million, beating the estimated 1.347 million. A report by the Federal Reserve on Wednesday also showed industrial production in the U.S. rose 0.7%, more than anticipated in April.

The USD/JPY pair slid 0.20% to 110.17. The pair came to a new high since early February this year, trading above the 110 level.

The AUD/USD pair added 0.36% at 0.7542. The Australian Bureau of Statistics data showed 22,600 jobs were added in April, beating the consensus estimate of 20,000 job additions. The 32,700 rise in full employment drove the job growth higher, providing support for the Aussie.

In China, the People's Bank of China set the set the reference rate for the yuan against the dollar, the mid-point from which the currency is allowed to trade, at 6.3679 versus the previous day's 6.3745. The USD/CNY pair dipped 0.18% to trade at 6.3599.