The Australian dollar slid against its U.S. counterpart on Thursday in Asia after data showing that the country’s unemployment rate jumped to the highest in eight months boosted expectations for an interest rate cut.
The unemployment rate rose for a second straight month to 5.2%, above forecasts for a reading of 5%.
The data has “increased the risk the Reserve Bank of Australia (RBA) will cut the cash rate in June, earlier than our call of July,” said Kaixin Owyong, Sydney-based economist at National Australia Bank, in a Reuters report.
AUD/USD slid 0.2% to 0.6914 by 1:00 AM ET (05:00 GMT), bringing losses for the month to date to 3.6%.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies was little changed at 97.340.
The greenback was under pressure as U.S. yields slid on weak U.S. April retail sales and industrial output data.
News that U.S. may delay tariffs on the auto sector by up to six months had little impact on the dollar today.
The USD/CNY pair rose 0.1% to 6.8778.
The USD/JPY pair edged down 0.1% to 109.46. Citing a government source with direct knowledge, Reuters reported that the Japanese government is considering downgrading its economic outlook amid the intensifying trade dispute between the U.S. and China. The ongoing trade war has negatively impacted Japanese exports and factory output, the reports said.
“Capital expenditure is likely to have deteriorated, and net exports may have improved as imports probably fell faster than shipments, which were not necessarily a good thing. As such, Q1 GDP will likely turn out poorly,” the source added.