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Currency Market Analysis

Feb 21, 2020 | Currency Market Analysis

Global Themes

AUD plunges through support, hits 11-year lows, after jobs

• Aussie hits new lows
• Jobs hit sentiment
• Manufacturing PMIs due

New lows

The AUDUSD broke below critical support at the 11-year lows yesterday after the January employment report hit sentiment.

While the number of jobs created was above expectations, a rise in the unemployment rate from 5.1% to 5.3% caused markets to speculate that the Reserve Bank of Australia might need to consider rate cuts.

The RBA said last year it is aiming to get the unemployment rate back to 4.5%.

The market sees a 50% chance of a rate cut by May.

USD strength

The Aussie’s move came in an environment of a super-charged US dollar that climbed to 12-year highs yesterday.

The AUDUSD fell 0.9%.

The Aussie was weaker in all other markets with the AUDCHF down 0.9% and the AUDEUR down 0.7%.

Manufacturing PMIs

The focus today shifts to global manufacturing numbers with the impact of the coronavirus to be closely watched.

In Australia, manufacturing remains underwhelming, with services also in contraction.

Later, Japanese, German and US numbers are all due.

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