The Australian dollar came crashing back down to earth today after disappointing jobs data again raised the question of another interest rate cut from the reserve bank of Australia.
At 7.30pm (GMT) the Aussie dollar was trading at US76.30c sharply down from US77.19c in yesterday’s trading.
Although the unemployment rate in Australian came in better than expected at 5.6 percent against analysts’ expectations for a figure of 5.7 percent, the number of full time jobs lost was staggering hitting the market at -53,000, well down on last month’s figure of over 10,000.
"Recently there have been more signs of a softening in the labour market than a strengthening," said Paul Dales, chief economist at Capital Economics.
He also mentioned that RBA governor Philip low was concerned over the state of the labour market and data such as this may force them to take action,
"The labour market is edging closer to the 'deterioration' that RBA Governor Lowe hinted earlier this week (and) could prompt more rate cuts."
The Aussie dollar may now find it hard to recover with the threat of a rate cut looming as well as the prospect of an interest rate rise from the US Federal Reserve by the end of the year which will erode the interest rate difference and also interest in the carry trade.