Australia’s dollar fell against all of its 16 major counterparts after a government report showed employers unexpectedly cut jobs in August. The so-called Aussie reversed yesterday’s gain against the dollar and the yen after data signaling slower growth in the U.S. and Japan damped optimism about the South Pacific nation’s trade prospects. The Federal Reserve said the U.S. economy grew at a slower pace in some regions and a report showed Japan’s current-account surplus shrank in July. “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 to $1.0577 at 1:35 p.m. in Sydney, from $1.0662 yesterday. It fell 0.6 percent to 81.86 yen. The New Zealand dollar fetched 83.27 U.S. cents from 83.20 yesterday, when it advanced 1.1 percent. The currency bought 64.43 yen from 64.28 yen. Australian 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. That followed a revised 4,100 drop in July. The jobless rate climbed to 5.3 percent, the highest since October, from 5.1 percent in July. RBA Rates Traders also added to bets that the Reserve Bank of Australia will lower its benchmark interest rate after the worse-than-expected 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 8 basis points, or 0.08 percentage point, to 4.03 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 three-year bond yields declined 12 basis points to 3.64 percent. Ten-year yields fell 10 basis points to 4.23 percent. Slowing Growth Australia’s currency is poised for its first weekly drop in four versus the dollar amid concern that slowing growth in developed economies may harm sentiment and reduce demand for the nation’s exports. U.S. economic activity “continued to expand at a modest pace, though some districts noted mixed or weakening activity,” the Fed said in its Beige Book survey released yesterday. San Francisco Fed President John C. Williams cut his growth forecast for the rest of 2011 yesterday, and said the economy probably won’t be able to expand enough to bring down a 9.1 percent jobless rate soon. 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. “Australia’s growth is largely dependent on overseas demand,” said Teppei Ino, an analyst at Bank of Tokyo- Mitsubishi UFJ Ltd. in Tokyo. “So a slowdown in the global economy, especially in those developed countries, will likely weigh on the Aussie.” To contact the reporters on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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