Aussie Tumbles as Markets Digest Fed’s Rate Cut, Australia’s Employment Report Doesn’t Help

The Australian dollar tumbled today, being one of the worst-performing currencies during Thursday’s trading session. The Aussie dropped along with other commodity currencies as markets were digesting yesterday’s hawkish interest rate cut by the Federal Reserve, though the seemingly good domestic employment report had parts that also could have a negative impact on the currency.
The Australian Bureau of Statistics reported that employment climbed by 34,700 in August on a seasonally adjusted basis, way more than analysts had predicted — 15,200. But the increase was only due to gains in part-time employment, which rose by 50,200. And full-time employment actually dropped by 15,500. Furthermore, the unemployment rate logged an unexpected increase from 5.2% to 5.3%.
The outlook for monetary policy of the Reserve Bank of Australia added to downside pressure on the Australian currency. Many market participants expect the RBA to cut interest rates as soon as the next meeting in October. And that has a negative effect on the Aussie’s performance.
AUD/USD dropped from 0.6826 to 0.6797 as of 9:26 GMT today, touching the low of 0.6780 intraday. EUR/AUD jumped from 1.6150 to 1.6273, trading near the highest level since September 3. AUD/JPY slumped from 74.03 to 73.38, and its daily low was at 73.12.

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