The Australian dollar declined against its major rivals on Thursday morning in Asia as an unexpected jump in Australia’s jobless rate in the month of July and a slide in Asian stocks reduced demand for higher-yielding currencies.
The unemployment rate in Australia increased by 0.2 percent in July to 5.3 percent, official data showed today. The figure was higher than the unchanged rate of 5.1 forecast by most economists.
The Australian Bureau of Statistics also reported that the economy added 23,500 jobs in July, taking the total number of jobs to 11.23 million. The jobs-added figure was higher than the 20,000 predicted by economists, and compares to the addition of 45,900 in June.
In other economic news, consumers in Australia expect inflation to decrease modestly, according to survey results released today by the Melbourne Institute.
The Institute’s consumer inflation expectations index fell to a rate of 2.8 percent in August from the July reading of 3.3 percent. It marked the fourth consecutive monthly decline in inflation expectations.
On the equity front, the Australian stock market is trading notably lower with investors pressing sales across the board amid mounting worries about the global economy.
The benchmark S&P/ASX 200 index is down 59.5 points or 1.3% at 4,396. The broader All Ordinaries index is trading at 4,416.40, down 63.30 points or 1.4% from its previous close.
Among other markets in the Asia-Pacific region, Japan, New Zealand, South Korea, Taiwan, Malaysia, Shanghai and Singapore are all down with notable losses.
Extending its 2-day losing streak, the Australian dollar fell to 75.87 against the yen around 9:40 pm ET and this set the lowest level for the pair since July 22.
On the downside, 74.70 is seen as the next likely target level for the Australian currency. The aussie-yen pair that finished yesterday’s deals at 76.55 is presently quoted at 76.09.
Against the US dollar, the Australian dollar tumbled to a 2-week low of 0.8921 around 10:00 pm ET and the next likely support level for the pair is seen at 0.89. The aussie-greenback pair, which closed Wednesday’s North American deals at 0.8972, is presently quoted at 0.8942.
The Commerce Department data on Wednesday showed that the U.S. trade deficit for June unexpectedly widened to reach its highest level in well over a year. The report showed that the trade deficit widened to $49.9 billion in June from a revised $42.0 billion in May.
The wider deficit came as a surprise to economists, who had expected the deficit to narrow modestly to $42.2 billion from the $42.3 billion originally reported for the previous month.
The aussie also reached as low as 1.4428 against the euro before holding steady around 10:00 pm ET. The euro-aussie pair that ended yesterday’s deals at 1.4346 is presently quoted at 1.4414.
The Australian dollar that closed Wednesday’s New York trading at 1.2563 against the New Zealand dollar showed choppy trading in early Asian deals on Thursday. The aussie-kiwi pair traded in a range-between 1.2615 and 1.2550 and is currently quoted at 1.2576.
The Australian dollar slipped to 0.9352 against the Canadian dollar by 10:00 pm ET and the pair thus tested yesterday’s 5-day low. The aussie-kiwi pair that was worth 0.9391 at Wednesday’s North American close is currently quoted at 0.9364.
Looking ahead, Japan is set to release its industrial production report for June and consumer confidence data for July shortly.
Euro-zone industrial production and Italian trade balance-both for June, Italian CPI data for July and the European Central Bank’s monthly report for August are expected in the European session.
Across the Atlantic, the U.S. weekly jobless claims data for the week ended August 7 and the import price index for July are expected to garner market attention in the North American session.