The Australian dollar fell by almost half a US cent after the release of worse than expected jobs figures.
The Australia dollar was worth 93.04 US cents at 1135 AEST, down from 93.43 US cents just before the data was released
Official jobs figures for July hit the dollar and also poured cold water on any expectations of a rate hike in the foreseeable future.
Australia’s jobless rate jumped to 6.4 per cent in July, from 6.0 per cent in June, official figures on Thursday showed.
Economists had expected unemployment to remain unchanged.
The total number of people with jobs also disappointed, falling by 300 against expectations that 12,000 jobs would be added to the economy.
The Australian Bureau of Statistics figures were significantly weaker than the market was looking for, JP Morgan economist Tom Kennedy said.
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“Unemployment has got to 6.4 per cent a lot quicker than we had expected and a lot faster than the Reserve Bank had expected as well,” Mr Kennedy said.
“The figures were very soft all round – there was virtually no employment growth, we’ve had hours fall, part-time employment fall and only very tepid full-time employment growth so all in all, a very, very soft report.
“This pours a little bit of cold water over those expecting an earlier rate hike.
“When you put this together with the expectation that tomorrow you are going to see the RBA downgrade their inflation forecast in the Statement on Monetary Policy, it really adds to the current guidance of the RBA that rates are going to remain on hold for a while yet.”
