SYDNEY: The Australian dollar has plunged to near six-year lows after the unemployment rate jumped to its highest level since May 2002.
At 4:04pm (AEDT), the local currency was trading at US76.49c, down more than US1c from US77.76c yesterday.
The Australian dollar fell on the back of official figures showing Australia’s unemployment rate reached 6.4 per cent in January, from 6.1 per cent in December.
The total number of people with jobs fell by 12,200 while full-time employment fell by 28,100.
The surprise deterioration in the labour market has increased expectation of further interest rate cuts from the Reserve Bank.
TD Securities head of Asia-Pacific research Annette Beacher said the unemployment rate trend was “not pretty”.
She said the Australian dollar slid on the weak headlines, “and with no silver linings present in the report, remains there”. Expectation of a RBA interest rate cut in March had jumped on the data, and would continue to climb, she said.
The disappointing numbers pushed Australian bond futures prices higher.
The March 2015 10-year bond futures contract was trading at 97.480 (implying a yield of 2.520 per cent), up from 97.445 (2.555 per cent) yesterday.
The March 2015 three-year bond futures contract was at 98.120 (1.880 per cent), up from 98.050 (1.950 per cent).
