The Australian dollar took a hit today after a round of disastrous job figures once again put an interest rate cut back on the table.
At 4.37pm (GMT) the Aussie dollar was trading at US71.39c down form US71.80c in yesterday’s trade.
Data out from the bureau of statistics showed the unemployment rate in Australia climbing to 6 percent against analysts’ expectations for a number of 5.8 percent.
An even bigger surprise was the number of jobs lost in the economy which came in at 7,900 against expectations of a 13,000 rise.
The news came as a complete shock to the market as investors sold off the Aussie dollar and started to place their bets on a potential rate cut from the Reserve Bank of Australia in the nearest future.
The RBA has been pretty happy with the Job market in recent months which has played a major factor in them refraining from tightening monetary policy so the latest figures may force a rethink.
With unemployment climbing and inflation sitting at the bottom end of the central bank’s preferred target, some are inclined to believe that the writing is on the wall in regards to a rate hike.
Also hurting the Australian dollar against its US (AUD/USD) counterpart was the latest jobless claims figure from the US which came in at 262,000 against expectations for a figure of 275,000, which shows the US job market is powering ahead and is seen as one of the key indicators for the US Federal Reserve to continue to hike interest rates.
ANDREW MASTERS, analyst FIBO Group
