Australian Dollar (AUD) Falls as Unemployment Jumps to 22-Year High
The Australian Dollar (AUD) struggled on Thursday after data revealed the country’s unemployment rate surged to a 22-year high of 7.4% in June.
This weighed on the ‘Aussie’ and offset Australia’s employment jumping by a record 210,800 as more people looked for work as the economy began to reopen.
Lower risk appetite also weighed on the Australian Dollar during yesterday’s session. If this continues today, it will send the risk-sensitive ‘Aussie’ lower as traders shift back to safe-haven currencies.
Pound (GBP) Struggles Against Mixed Employment Data
The Pound (GBP) was mixed during yesterday’s session, with the risk-off mood weighing on the currency.
The latest employment data offered some support as the unemployment rate remained steady at 3.9%. However, further data showed the number of employees on payrolls tumbled 649,000 between March and June. With downbeat GDP for May, many investors are now concerned the fiscal stimulus measures will not be enough to aid a comprehensive economic recovery.
Looking ahead, Sterling could be offered some support if today’s GfK flash consumer confidence rises more than expected in July.
Euro (EUR) Edges Higher as ECB Wait and See
The Euro (EUR) edged higher after the European Central Bank (ECB) opted to wait and see, leaving interest rates and its coronavirus stimulus programme unchanged.
ECB Chief Christine Lagarde also noted that the second wave of coronavirus in the US was a ‘concern’ and is something the governing council discussed during its meeting this week.
Euro traders will be focused on today’s inflation data, which could offer the currency some support if June’s final data impresses investors. Traders will also be focused on the EU meeting on the bloc’s coronavirus recovery fund.
US Dollar (USD) Rises as Traders Flock to Safety
The US Dollar (USD) benefitted on Thursday as risk appetite slumped, and traders flocked back to safety.
Separate data showed that while US retail sales jumped more than expected, this was threatened by the resurgence in coronavirus cases and high levels of unemployment. The latest initial jobless claims showed another 1.3 million Americans filed for jobless benefits, further dampening hopes of an economic rebound.
Today’s housing data could limit USD gains and boost risk appetite if the statistics show the housing market is returning to its pre-Covid levels.
Canadian Dollar (CAD) Stalls as OPEC+ Ease Record Oil Supply Cuts
The Canadian Dollar (CAD) remained largely flat yesterday after oil prices eased. Prices fell during Thursday’s session after OPEC+ agreed to ease record supply cuts from August.
However, tightening global oil inventories cushioned the blow as the oil producers agreed to reduce the current cuts from 9.7 million barrels per day to 7.7 million barrels per day through to December.
Looking to tomorrow, the ‘Loonie’ could make some gains if May’s wholesales sales rebound after plummeting in April.
New Zealand Dollar (NZD) Slides on Weak Chinese Data
The New Zealand Dollar (NZD) slumped yesterday as trader attention turned to weak Chinese retail sales which dampened hopes for a swift economic rebound. This poured cold water on earlier optimism over hopes of a coronavirus vaccine that supported an upbeat market mood.
Looking ahead, the ‘Kiwi’ could claw back some losses if today’s release of June’s Business NZ PMI impresses NZD traders.
Upcoming Data
17 July 08:30 NZD Business NZ PMI (June) 43
17 July 09:01 GBP GfK Consumer Confidence Flash (July) -26
17 July 19:00 EUR Construction Output (May) -23%
17 July 19:00 EUR Inflation (June) 0.3%
17 July 19:00 EUR Core Inflation (June) 0.8%
17 July 22:30 CAD Wholesale Sales (May) 10%
17 July 22:30 USD Housing Starts (June) 12.9%
17 July 22:30 USD Building Permits (June) 2.5%