News Column

Aussie Drops As Australia's Employment Falls Unexpectedly

June 11, 2014

CANBERA (Alliance News) - The Australian dollar weakened against the other major currencies in the Asian session on Thursday after the release of a report showing an unexpected decline in Australia's employment in May.

Data from the Australian Bureau Of Statistics showed that the number of employed people fell 4,800, from 10,300 in the preceding month whose figure was revised down from 14,200. Analysts expected an increase of 10,000 jobs.

The number of unemployed people rose by 3,200 over the month to 717,100 in May. Out of the total, the number of unemployed looking for full-time work rose 9,000 to 529,700 and for part-time it decreased 5,900 to 187,400.

The unemployment rate came in at 5.8% in May, the same rate as in April and March. Economists had forecast the unemployment rate to stay flat at 5.8%.

Easing from an early multi-week high of 0.9411 against the US dollar, the Australian dollar dropped to a 2-day low of 0.9348. At yesterday's close, the aussie was trading at 0.9375. The next possible downside target level for the aussie is seen at 0.92.

Moving away from an early high of 1.0952 against the NZ dollar, the Australian dollar fell to more than a 2-week low of 1.0812. If the aussie extends its downtrend, it is likely to find support around the 1.07 zone.

The Reserve Bank of New Zealand this morning raised the official cash rate by 25 basis points to 3%, the third rise this year. The OCR raise was in line with the economists estimate.

The Australian dollar retreated to a 2-day low of 1.4476 against the euro, from an early 6-1/2-month high of 1.4375. Yesterday's closing value of the euro-aussie pair was worth 1.4412. The aussie may possibly find support around the 1.45 zone.

The aussie eased to a 1-week low of 1.0158 against the Canadian dollar and a 6-day low of 95.38 against the yen, from early highs of 1.0223 and 95.96, respectively. The aussie closed yesterday's deals at 1.0194 against the loonie and 95.71 against the yen. If the aussie extend its fall, it may find support around the 1.00 area.

Looking ahead, German wholesale price index for May is due at 2:00 am ET.

In the European session, European Central Bank monthly Report and Eurozone industrial production data for April are due to be released.

In the New York session, Canada new housing price index for April, US retail sales and import price index for May, weekly jobless claims for the week ended June 7 and business inventories data for April are due.

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Source: Alliance News

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