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Australian Dollar Sinks After Extremely Bad Employment Data

June 18, 2020 at 13:58 by Vladimir Vyun

A heap of Australian dollarsThe Australian dollar was extremely weak today following the release of a very disappointing employment report. The Aussie fell against almost all of its most-traded peers, even the New Zealand dollar that was weak itself, but not against the Great Britain pound.

The Australian Bureau of Statistics reported that the number of employed Australians dropped by 227,700 in May on a seasonally adjusted basis. Both full-time and part-time employment registered a decline. Analysts were predicting a much smaller decrease of 105,000. Furthermore, the previous month’s drop got a negative revision from 594,300 to 607,400. And on top of that, the unemployment rate climbed to 7.1% from the previous month’s level of 6.4% (which itself was revised from 6.2%), exceeding the consensus forecast of 6.9%.

Another negative factor to the Australian currency was the growing geopolitical tension between Australia and China. Foreign Minister Marise Payne claimed that China and Russia were using the COVID-19 pandemic to spread disinformation and social division. In response, China’s foreign ministry spokesman Zhao Lijian said that Australia was spreading misinformation itself for political gain. Earlier, China banned imports from four Australian abattoirs and put heavy tariffs on Australian barley imports in response to Australia’s demand for investigations of the handling of the coronavirus outbreak by China. Considering that China is Australia’s biggest trading partner, the worsening relations between the countries can derail the Australian economic recovery after the pandemic.

AUD/USD fell from 0.6883 to 0.6841 as of 13:57 GMT today. EUR/AUD rose from 1.6329 to 1.6391. GBP/AUD dropped to 1.8166 after opening at 1.8236 and rising to the daily high of 1.8318.

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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