- AUD/USD hit a 4.5-month low following the Aussie jobs data release.
- The Aussie unemployment rate ticked higher to 5.2%, while full-time jobs dropped in April.
- The labor data released today may boost expectations of an RBA rate cut in June.
The AUD/USD pair slipped to 0.6893 – the lowest level since Jan. 3 – on the back of a bigger-than-expected jump in Australia’s unemployment rate.
The official data released soon before press time showed the jobless rate ticked higher to 5.2% in April, beating the expected print of 5.1%. The previous month’s print was also revised higher to 5.1% from 5.0%. Further, the economy added 28.4K jobs in April, beating the estimate of 14.0K by a big margin.
The big beat on the headline figure isn’t helping the AUD as the Full-Time Employment dipped by 6.3K, following a 48.3K rise in March.
With the full-time jobs and unemployment rate disappointing expectations, the probability that the RBA would cut rates by 25 basis points in June may rise above 50% from the current 37%. As a result, the AUD/USD could slip further during the day.
Supporting that bearish view is Australia’s 10-year government bond yield, which is currently trading at a record low of 1.64%, down four basis points on the back of dismal labor market data.
As of writing, the currency pair is trading at 0.6907, representing a 0.25% drop in the day.