Australian Dollar New Zealand Dollar (AUD/NZD) Exchange Rate Edges Down as Aussie Unemployment Rises
The Australian Dollar New Zealand Dollar (AUD/NZD) exchange rate edged down and the pairing is currently trading at an inter-bank rate of NZ$1.0531.
Australian unemployment edged up to 5.2% in April, leaving the rate at the highest level since August 2018.
This likely increased pressure on the Reserve Bank of Australia (RBA) to cut interest rates as unemployment moved further away from February’s eight-year low.
Data revealed that full-time employment fell by 6,300 which was masked by a jump of 34,700 in part-time workers.
The Australian participation rate rose to 65.8%, a record high.
However, the pace of hiring has been unable to keep up with the increase in the labour force which likely weighed on the ‘Aussie’.
Australian Dollar (AUD) Slips as US Slaps Huawei with Sanctions
The US escalated trade tensions with China on Wednesday as the US hit Chinese telecoms company, Huawei with severe sanctions.
Huawei Technologies Co Ltd as well as 70 affiliates are to be added to the US Commerce Department’s ‘Entity List’.
The move bans the Chinese telecoms giant from acquiring technology and components from US firms without US government approval.
This likely dampened sentiment in both the risk-sensitive AUD and NZD as risk appetite became increasingly fragile.
New Zealand Dollar (NZD) Edges Up as US Announce Further Trade Discussions
The escalation came following reports that US Treasury Secretary Steven Mnuchin stated he would visit China soon for further trade discussions.
However, Chinese Spokesman Gao Feng stated that he had no information on any plans for a US trade delegation to visit China.
Commenting on the sanctions on Huawei, Geo Feng stated:
‘China has emphasised many times that the concept of national security should not be abused, and that it should not be used as a tool for trade protectionism.
‘China will take all the necessary measures to resolutely safeguard the legitimate rights of Chinese firms.’
Australian Dollar New Zealand Dollar Outlook: Will a Higher than Forecast Business NZ PMI Buoy NZD?
Looking ahead to the start of Friday’s session, the New Zealand Dollar (NZD) could rise against the Australian Dollar (AUD) following the release of the business NZ PMI.
If April’s business PMI rises higher than forecast, the ‘Kiwi’ could receive an upswing of support.
Meanwhile, May’s Australian consumer inflation expectations could dampen sentiment in the ‘Aussie’.
If inflation expectations slips further than forecast as pressure on the RBA to cut interest rates heightens, the Australian Dollar New Zealand Dollar (AUD/NZD) exchange rate could fall.