The selloff in the Australian Dollar has gathered pace after the release of worse than expected US initial jobless claims data and following dismal Australian labour market numbers earlier in the session.
At 13:45 UTC, AUD/USD is trading -0.6% at US$0.6413. This is at the lower end of the daily traded range of US$0.6404 – US$0.6462.
The Australian Dollar has been trending lower versus its US counterpart for 4 straight sessions, putting the pair on track for its first weekly loss in 6 weeks.
AUD: Australian Unemployment at 5 Year High
Data out overnight set the Aussie off on the back foot. Australian labour market data showed that 594,300 Australian jobs were lost in April. This was worse than the 575,000 than analyst had forecast. The unemployment rate also ticked higher from 5.2% to 6.2%, the highest level since 2015.
According to the Australian Bureau of Statistics the indicators from the labour report indicate that one in five persons employed in March either left employment or had their hours reduced between March and April as the country heads into recession. The figures paint a grim picture for the near-term outlook of the Australian economy, pressuring the Australian Dollar.
There is not high impacting Australian data due for the rest of this week. Australian Dollar investors will look towards Chinese industrial production figures for clues over the strength of the rebound in China, Australia’s largest trading partner.
USD: 2.98 Million Initial Jobless Claims vs 2.5 Million Expected
The coronavirus pandemic continued to ravage the US labour market in May. The US Labour Department’s initial jobless claims report revealed that an additional 2.98 million Americans signed up for unemployment benefits in the week ending 9th May. This was well above expectations of 2.5 million. Over the past two months more than 36 million Americans have filed unemployment insurance claims. The downbeat report boosted demand for the safe haven US Dollar.
Today’s initial jobless claims come following last week’s non-farm payroll report which showed that 20.5 million jobs were lost across the month of April. The worst reading on record, taking the unemployment rate to 14.7%.
The figures being released are unprecedented. However, as many states and businesses start to reopen hiring should resume and the economy should start to revive. This could be a prolonged process, as Federal Reserve Chairman Jerome Powell warned yesterday.
