Australian dollar recovering from Thursday jobs data loss

THE Australian dollar has recovered some of the losses it suffered on the back of disappointing unemployment data.

Australian Money. Close up. Thinkstock

THE Australian dollar has recovered some of the losses it suffered on the back of disappointing unemployment data.

At 0700 AEST on Friday, the local currency was trading at 93.95 US cents, up from 93.69 cents on Thursday.

The Australian dollar fell on Thursday after labour force figures showed the unemployment rate hit 6.0 per cent in June. On a positive note, the economy added almost 16,000 jobs — better than the 12,000 economists were expecting.

But the gain in jobs is not as encouraging as it looks and hides problems within the labour market, BK Asset Management managing director Boris Schlossberg said.

“The gain in the jobs number was due solely to a pick-up in part-time employment. Full-time jobs actually declined,” Mr Schlossberg said.

A run of disappointing jobs reports, combined with cooler inflation in the March quarter, means another rate cut could be on the cards, he said.

“The RBA (Reserve Bank of Australia) could surprise the market with another rate cut if such trends persist into the second half of the year,” Mr Schlossberg said.

“This would especially be true if the Australian dollar exchange rate remains highly elevated, as the RBA continues to be concerned about the deteriorating terms of trade.” He said weaker-than-expected Chinese trade figures also put pressure on the Australian dollar on Thursday.

Originally published as Australian dollar recovering from Thursday jobs data loss