The Kiwi Dollar has lost further ground overnight as the US Dollar strengthened on better than expected economic data. Market risk sentient has continued to improve with equity markets making further gains, but this has not helped the NZD or AUD which have both continued to trend downwards. The Aussie is under pressure following on from yesterdays labour market data which showed unemployment rise to 5.2%. This has had a flow on effect to the NZD, which has drifted towards 6 month lows overnight.
Upbeat U.S Data
US weekly initial jobless claims fell more than expected last week, pointing to sustained labour market strength that should underpin the economy as growth slows. Initial claims for state unemployment benefits dropped 16,000 to a seasonally adjusted 212,000 for the week ended May 11, better than market expectations of 221,000. Looking ahead, we have the closely watched University of Michigan Sentiment Index number released tonight.
AU Employment Disappoints
The AUD and NZD have been two of the worst performing currencies over the past 24 hours, both down by around 0.4%. Softer than expected Australian employment data kicked off the Aussie selling, which fell to a four month low, as the annual unemployment rate for April came in at 5.2% vs market expectations of 5.0%. The weaker number has raised the probability of a June interest rate cut from the RBA.
Pound Falls to Three Month Low
The British Pound remained under pressure, losing ground vs the USD for the ninth day in a row. Political uncertainty and Brexit concerns continue to weigh on the currency with Prime Minister Theresa May announcing a timetable for her to step down from her role. May is expected to resign immediately if she loses the next parliamentary vote on her latest Brexit Proposal next month.
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