“Australia’s dollar slid versus its major peers after data showed the nation’s unemployment rate climbed to a three-year high, fanning speculation the Reserve Bank will lower borrowing costs to support growth.
The yield on Australia’s benchmark three-year note fell, snapping a two-day gain. The New Zealand dollar touched 86 U.S. cents for the first time in 1 1/2 years after reports showed the nation’s manufacturing industry expanded last month and a gauge of home prices advanced to a record.
“We’ll probably see weakness on the crosses for the next couple of days, as the view on a recovery in the Australian labor market remains challenged, and also the RBA retains its easing bias,” said Andrew Salter, a Sydney-based foreign- exchange strategist at Australia & New Zealand Banking Group Ltd. (ANZ), referring to Australia’s dollar against its peers.
The Australian dollar lost 0.2 percent to $1.0520 as of 4:57 p.m. in Sydney. The New Zealand dollar, known as the kiwi, rose 0.2 percent to 85.91. The climb to 86 was the first time for the currency since August 2011.
Australia’s three-year note yield fell two basis points, or 0.02 percentage point, to 2.81 percent. It slid to 2.75 percent on April 8, a level unseen since March 5.
The nation’s jobless rate rose to 5.6 percent last month, the highest since 2009, from 5.4 percent in February, the statistics bureau said in Sydney today. The number of people employed dropped by 36,100, compared with the 7,500 decline estimated by economists in a Bloomberg News survey.
RBA Outlook
Swaps traders see a 61 percent chance that the Reserve Bank of Australia will cut the benchmark rate from 3 percent by October, according to data compiled by Bloomberg on overnight- index swaps. The probability was 57 percent yesterday.
New Zealand’s Performance of Manufacturing Index was 53.4 in March, remaining above the 50 level which indicates expansion for a sixth month, Bank of New Zealand and Business New Zealand reported….”
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