By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) — The Australian dollar slipped against the greenback Thursday, after data showing slower jobs growth dashed hopes for another interest-rate hike by the Reserve Bank of Australia anytime soon.
The Aussie AUDUSD -0.33% was buying $1.0588, down 0.5%.
The total number of employed people in May increased by a seasonally adjusted 7,800 to 11.44 million, falling short of the 25,000 gain expected by economists surveyed by Dow Jones Newswires. Read more on Australia jobs data.
The data followed the RBA’s decision Tuesday to keep its key policy interest rate on hold for the seventh straight month. It said in a statement that it still views current monetary policy as “mildly restrictive.” Read more on RBA meeting.
Wednesday’s jobs data “will reinforce expectations that the RBA will not hike interest rates over coming months, with July and August effectively ruled out, though a hike in September remains probable,” Mitul Kotecha, head of global forex strategy at Credit Agricole, wrote in a note to clients.
“Clearly the combination of the RBA statement and weak jobs data has resulted in a major headwind against further near-term [Australian dollar] appreciation,” Kotecha said.
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Euro rises
The euro gained ahead of the European Central Bank meeting later Thursday. The ECB was widely expected to leave interest rates on hold, but central bank chief Jean-Claude Trichet was expected to hint at a rate hike coming in July. Read ECB preview.
The ECB Governing Council was due to announce the outcome of its monthly meeting at 1:45 p.m. Frankfurt time, or 7:45 a.m. U.S. Eastern time.
The euro EURUSD +0.30% rose to $1.4626 from $1.4573 in late North American trading on Wednesday. See real-time currency quotes and tools.
The dollar index DXY -0.11% , which measures the performance of the U.S. unit against a basket of six currencies, slipped to 73.781 from 73.946 late Wednesday.
The dollar USDJPY +0.26% bought ¥80.04, slightly up from ¥79.95 late Wednesday.
On Wednesday, the dollar was pressured against the yen as U.S. Treasury yields fell to new lows — in particular, 2-year note yields 2_YEAR +3.09% approached a record low. Japanese investors are big buyers of U.S. debt. Read more on Treasury yields.
Lisa Twaronite is MarketWatch's Tokyo bureau chief.
