Forex - AUD/USD drops on weak Australian jobs figures

Published 07/11/2012, 10:12 PM
Updated 07/11/2012, 10:13 PM
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Investing.com - The Australian dollar dropped against its U.S. counterpart on Thursday after news broke the number of employed people fell by 27,000 in June, much worse than expected.

In Asian trading on Thursday, AUD/USD hit 1.0189, down 0.61%, up from a session low of 1.0180 and off from a high of 1.0252.

The pair was likely to test support at 1.0155, the low from July 9, and resistance at 1.0281, the high on July 11.

The Australian Bureau of Statistics reported Thursday that the country lost 27,000 jobs in June compared with a gain of 38,900 in May.

Analysts had expected Australian employment change to rise by 3,000 in June.

The country's unemployment rate rose to 5.2% in June from 5.1% in May.

The news sent the Australian dollar plunging against its U.S. counterpart, which was on the rise against most other currencies in Asian trading anyway.

In the U.S. on Wednesday, the Federal Reserve released the minutes of its June 19-20 monetary policy meeting, in which the U.S. central bank largely reiterated that it will be willing to intervene and stimulate the economy but only if the country takes a more marked turn for the worse.

Markets were expecting hints the Fed would act more aggressively to prop up the economy in wake of poor jobs reports and other economic indicators, which would have weakened the U.S. currency.

"A few members expressed the view that further policy stimulus likely would be necessary to promote satisfactory growth in employment and to ensure that the inflation rate would be at the Committee's goal," the Federal Reserve said in the minutes released in the U.S. on Wednesday.

"Several others noted that additional policy action could be warranted if the economic recovery were to lose momentum, if the downside risks to the forecast became sufficiently pronounced, or if inflation seemed likely to run persistently below the Committee's longer-run objective."  

The Australian dollar, meanwhile was down against the euro and down against the yen, with EUR/AUD up 0.49% at 1.2000 and AUD/JPY down 0.76% at 81.14.

Later Thursday, the U.S. will release weekly data on unemployment claims and figures on import prices, followed by the monthly Treasury statement.







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