The Australian dollar was lower against the US dollar on Thursday after data showing an increase in Australian unemployment and rising US manufacturing activity added fuel to the fire of an already very weak exchange rate down at the lowest in over a decade.
AUD/USD was lower by 50 pips (-0.76%) to 0.6626 with a daily price range of 0.662 to 0.669 as of 4pm GMT.
AUD/USD careered lower in early trading but 0.665 proved resistance to a small bounce and the pair went to on to reach new 11-year lows. Adding in today’s sharp falls’ the exchange rate is down -1.33% so far this week.
The Australian dollar
New decade lows versus the greenback for the Aussie came after Australian unemployment rose more than expected in January in a sign that the one-two punch of the bushfires and the coronavirus outbreak might be proving too much for the Australian businesses to handle. The Australian unemployment rate grew to 5.3% in January against the 5.2% expected and 5.1% in December.
The RBA minutes released recently showed the central bank was weighing up lowering interest rates to speed up the movement in the economy towards its jobs and inflation goals. Today’s data, if it becomes part of a trend of softer economic data might mean next time they choose differently.
Uncertainty about the coronavirus continues to play on investors minds, especially as the number of cases in South Korea rapidly rises while data of China loses its trustworthiness following two methodology changes that left China Global Times newspaper to conclude the actual number of cases is unknown.
The US dollar
The dollar made more progress on Thursday after data from the US continued to surprise to the upside. The rebound in manufacturing symbolises the turnaround in the US economy since the US-China phase one trade deal was completed. The Philly Fed manufacturing index rose to 36.7, ahead of the 12 expected and 17 previously. FOMC minutes confirmed the Federal Reserve identifies the restored US data and is satisfied to keep interest rates as they are.