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Aussie Dollar Slides as Unemployment Rate Jumps

5/16/2019, 2:19:27 PMBasics of Trading
Aussie Dollar Slides as Unemployment Rate Jumps

The Aussie dollar slid against the U.S. dollar on Thursday in Asia as data showed Australia’s unemployment rate jumped to the highest in eight months.

The unemployment rate rose for a second straight month to 5.2 percent, when analysts had expected 5.1 percent, as the participation rate climbed to 65.8 percent indicating more people went looking for work.

The data has "increased the risk the Reserve Bank of Australia (RBA) will cut the cash rate in June, earlier than our call of July," said Kaixin Owyong, Sydney-based economist at National Australia Bank, in a Reuters report.

The AUD/USD pair slid 0.2% to 0.6914 by 1:00 AM ET (05:00 GMT). The pair has fallen 3.6% in the past month.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies were little changed at 97.340.

The greenback was under pressure as U.S. yields slid on weak U.S. April retail sales and industrial output data.

Meanwhile, news that U.S. may delay tariffs on the sector by up to six months had little impact on the dollar today.

The USD/CNY pair rose 0.1% to 6.8778. Yesterday, China had reported weaker-than-expected growth in both retail sales and industrial output for April.

The USD/JPY pair edged down 0.1% to 109.46. Citing a government source with direct knowledge, Reuters reported that the Japanese government is considering downgrading the economy next week amid intensifying trade dispute between the U.S. and China.

The ongoing trade war has negatively impacted Japanese exports and factory output, the reports said.

"Capital expenditure is likely to have deteriorated, and net exports may have improved as imports probably fell faster than shipments, which were not necessarily a good thing. As such, Q1 GDP will likely turn out poorly," the source added.