The Australian dollar dropped sharply on Thursday morning against major trading partners and especially versus the U.S. dollar after the Australian employers unexpectedly cut jobs during the month of April, the most since 2009.
The economy has cut 22,100 workers opposed to expectations for hiring about 17,000 workers, while the unemployment rate remained unchanged at 4.9%.
Moreover, analysts increased their expectations that the Reserve Bank of Australia (RBA) won’t raise interest rates during the next meeting, as they already left interest rates unchanged for the past five meeting, which lowered the demand for the Australian dollar.
On the other hand, Australia’s government said this week that it will end 23 years of spending growth to curb inflation from the mining boom and support the return to a budget surplus.
Consumer prices may rise an annual 3.0% percent in the next five years, according to the gap between yields on government bonds and inflation-indexed notes. The RBA aims to hold inflation between 2% and 3%.
On Friday, the Australia won’t release any fundamentals, but at 12:30 GMT the U.S. economy will release the consumer price index for April, where the previous reading was 0.5% and is anticipated to retreat to 0.4%, while the annual reading is expected to rise to 3.1% from 2.7%.
The American economy will end the week with the preliminary May survey for the University of Michigan confidence at 13:55 GMT, as it is expected to come at 70 better than the previous reading of 69.8.
Written by ForexMansion.com