The Australian and New Zealand Dollars are trading lower on Thursday following the release of key economic reports. Both currencies are still feeling pressure from yesterday’s surge in the U.S. Dollar following the release of several major announcements from the U.S. Federal Reserve. Basically, the Fed vowed to keep interest rates low for a long time while battling low inflation and a sluggish labor market.
At 16:30 GMT, the AUD/USD is trading .7283, down 0.0021 or -0.29% and the NZD/USD is at .6731, down 0.0001 or -0.01%.
The Australian Dollar briefly surged on strong jobs data but retraced its gains as the currency was swamped by a firmer U.S. Dollar.
Australia’s jobless rate unexpectedly slipped from a 22-year high in August as employment surged past expectations helped by part-time work, but the economic toll from the pandemic has hit young job seekers hard.
The country’s overall jobless rate fell to 6.8% in August as employment skyrocketed by 111,000, Australian Bureau of Statistics (ABS) data showed on Thursday. That was better than economists’ forecasts of 7.7% and a 50,000 fall in jobs in a Reuters poll.
But the figures were less positive for 15 to 24 year olds, with the unemployment rate now hovering near 20%, more than three times the national tally. During the 2008/09 global financial crisis, the rate was 10%-12%.
New Zealand Dollar
New Zealand fell into its deepest economic slump on record in the second quarter as its battle against the coronavirus pandemic paralyzed business activity, official data showed on Thursday.
Gross Domestic Product contracted a seasonally adjusted 12.2% quarter-on-quarter, its sharpest quarterly contraction on record and largely in line with forecasts of a 12.8% decline from economists polled by Reuters. GDP fell 12.4% year-on-year.
The Reserve Bank of New Zealand had forecast a quarterly and annual GDP decline of 14% in its August statement.
There was little reaction to the jobs reports and GDP data because the direction of the Aussie and Kiwi at this time is being primarily driven by risk sentiment. With U.S. equity markets trading lower, it’s going to be hard to bullish.
Additionally, the data didn’t really surprise anyone and most economists are calling for the Australia and New Zealand economies to bounce back strong during the third quarter.
This article was originally posted on FX Empire
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