Australian Dollar Plummets, Canadian and New Zealand Dollars Follow Suit

The Australian dollar plummeted following the surprise drop in employment last month. The market was expecting a rise of 13,500 jobs, but instead, 19,700 jobs were lost between April and May.

The unemployment rate increased from 4.2 to 4.3 percent, putting an end to 19 months of consecutive job growth. Prior to the employment report, there was widespread belief that the Reserve Bank of Australia would raise interest rates in the coming months and even though this report certainly throws a wrench into those forecasts, the acting Treasurer reminded the market that there is no room for complacency in their “war” against inflation. New Zealand retail sales are due for release this evening. Although they are expected to be rebound due to an improvement in credit card spending, business PMI dipped into contractionary territory last month, so traders should not completely rule out a miss. The Canadian dollar on the other hand has only weakened slightly against the greenback.