Australian Dollar Declines After Employers Unexpectedly Cut Jobs in August
Australia’s dollar fell against the greenback after a report showed employers unexpectedly cut positions in August and the jobless rate increased.
“We’re seeing Aussie coming off since jobs data was very weak,” said Sue Trinh, a senior currency strategist at Royal Bank of Canada in Hong Kong. “With the unemployment rate ticking higher, investors are suggesting having restrictive policy settings may be somewhat inappropriate.”
Australia’s currency dropped 0.3 percent to $1.0627 at 12:51 p.m. in New York, from $1.0662 yesterday. The New Zealand dollar rose 0.5 percent to 83.63 U.S. cents, from 83.20.
Employers cut workers for a second straight month in August, the statistics bureau said in Sydney today. The number of people employed fell by 9,700, compared with the median estimate for a 10,000 increase in a Bloomberg News survey of economists. The jobless rate climbed to 5.3 percent, the highest since October, from 5.1 percent in July.
Traders added to bets that the Reserve Bank of Australia will lower its benchmark interest rate after the jobs report stoked concern that the domestic economy is weakening. Policy makers this week held the cash target at 4.75 percent for a ninth straight meeting.
The yield on December interbank cash-rate futures fell seven basis points, or 0.07 percentage point, to 4.04 percent on the Sydney Futures Exchange today.
“Deceleration in annual employment growth is already on the RBA’s radar screen,” Annette Beacher, the Singapore-based head of Asia-Pacific research at Toronto-Dominion Bank’s TD Securities unit, wrote in a note today. “Another sharp rise in the unemployment rate will be cause for concern.”
Australia’s currency was poised for its first weekly drop since mid-August versus the U.S. dollar on concern slowing growth in developed economies may harm sentiment and reduce demand for the South Pacific nation’s exports.
U.S. jobless claims rose by 2,000 to 414,000 in the week ended Sept. 3, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 405,000, according to the median forecast.
Japan’s current-account surplus sank 42 percent in July from a year earlier, the Finance Ministry said in Tokyo today. Machinery orders dropped 8.2 percent in July from June, the Cabinet Office said today.
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