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Australian Dollar Drops After Unemployment Rate Rises

February 20, 2020 at 11:17 by Vladimir Vyun

Banjo Paterson on Australian 10-dollar billThe Australian dollar fell against almost all most-traded currencies today (with the exception of the New Zealand dollar) after the release of an employment report. While the employment figures were not that bad, the bigger-than-expected increase of unemployment made the currency unappealing to traders.

The Australian Bureau of Statistics reported that the seasonally adjusted number of employed Australians increased by 13,500 in January. That was a bigger increase than 10,000 predicted by experts. The increase was due to the gain of 46,200 in full-time employment, while part-time employment decreased by 32,700. At the same time, the unemployment rate increased from 5.1% to 5.3%, whereas analysts had predicted a smaller increase to 5.2%. The bigger-than-expected increase of the unemployment rate led to speculations that the Reserve Bank of Australia will keep interest rates low for a longer time.

The Aussie together with other currencies continued to react to news about the coronavirus outbreak. Today, reports were mixed. While the number of new confirmed cases decreased sharply in China, the death toll continued to climb at about the same pace. What is more, the number of confirmed cases in some other countries, like Japan and South Korea, continued to rise. That led to fears that, while China may be able to stop the spread of the virus inside the country, the deadly disease will continue to spread throughout the world.

AUD/USD dropped from 0.6674 to 0.6628 as of 11:16 GMT today. EUR/AUD gained from 1.6177 to 1.6278. At the same time, AUD/NZD edged up from 1.0454 to 1.0460, bouncing from the daily low of 1.0428.

If you have any questions, comments, or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

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