WSJ:Australian Dollar Down Late After Soft Jobs Numbers
Rates At 0611 GMT
Latest Change
AUD/USD 1.0592 -0.1%
AUD/JPY 81.925 -0.01%
6.50% May, 2013 3.6591% -0.12
4.50% Mar, 2020 4.1941% -0.06
10-Yr Spread To U.S. +221 bps +18 bps
SFE Dec 3-Year Futures 96.29 +0.10
SFE Dec 10-Year Futures 95.745 +0.08
SYDNEY (Dow Jones)--Weaker than expected jobs numbers sent the Australian dollar to session lows Thursday as analysts said rising unemployment is beginning to show a trend, raising the prospect of a possible rate cut in coming months.
Unemployment rose to a higher-than-expected 5.3% in August--a near 12 month high--from 5.1% in July, while the number of employed fell 9,700, the Australian Bureau of Statistics said Thursday. Economists had expected 5.1% unemployment and 11,000 new jobs.
At 0611 GMT, the Australian dollar was at US$1.0592, down from US$1.0606 late Wednesday and US$1.0640 before the jobs data. Against the Japanese yen, the Australian dollar was at Y81.925, down from Y81.935.
"This was a surprisingly very weak read on the Australian jobs market," said Justin Smirk, a senior economist at Westpac. "This suggests that the benefits of the current mining boom are not spreading as widely as many had hoped."
The data prompted a flurry of analysts to predict the Reserve Bank of Australia may need to begin easing policy sooner than anticipated, although the rates market has long been pricing in rate cuts.
"In the past two rate cutting cycles, the RBA acted after smaller moves than we have seen on this occasion. While no two periods are the same, the weakness in the labor market could force the RBA to ease rates by the end of the year," said economists at Bank of America Merrill Lynch in a note.
But the focus will quickly shift offshore where a slew of central banks are due to meet including the European Central Bank and Bank of England. Federal Reserve Chairman Ben Bernanke is also due to speak.
"We do not expect Bernanke to provide more details about policy options for stimulating growth ahead of the FOMC meeting in September although he may sound more cautious," said Manuel Oliveri, an FX strategist at UBS.
Dealers are also waiting on a speech by U.S. President Barack Obama where he is expected to unveil a US$300 billion package to support jobs.
-By Enda Curran, Dow Jones Newswires; 61-2-8272-4687; enda.curran@dowjones.com
