Investors appeared unfazed by the highest US unemployment rate since 1939. The Australian Dollar held onto its gains versus its US counterpart.
At 14:45 UTC, AUD / USD is trading + 0.3% at US $ 6514.
Today’s move higher for the Australian Dollar US Dollar exchange rate build on gains from the previous session, which saw the pair advance 1.5% to settle at US $ 0.6495. The Australian Dollar is on track to have rallied 1.5% across the week, adding to a 6.1% surge across April.
US – Sino Trade Talks Boost Aussie Dollar
The perceived riskier Australian Dollar rose in the Asian session and maintained those gains across the day on strong risk appetite in the markets. Top US and Chinese trade representatives discussed the implementation of the Phase One trade agreement. Both sides agreed that progress had been made and that obligations would be met, easing fears of rising tensions between the two powers.
The news come after tension had escalated last week after President Trump’s efforts to pin the blame for coronavirus on China.
US Dollar Bare Flinches at 20.5 Million Jobs Are Lost
Today’s US jobs report was terrible, with 20.5 million jobs lost in April and the unemployment rate at 14.7% as a result of coronavirus lockdown measures. Whilst this was a marginally better report than forecast it is still nothing worth cheering.
Delving deeper into the numbers the job losses were broader than expected, showing that it wasn’t just the leisure, retail and the hospitality sectors which were experiencing job losses. Steep job cuts were also seen in business services, manufacturing, and construction.
Average hourly wages jumped to 4.7%, however this is because of more people towards the lower end of the income spectrum dropping out of the calculation for “average” hourly earnings. Its safe to say very few if any are getting a pay rise right now in the US.
The US dollar barely flinched following the report. This is because the markets were expecting a horrible report. Figures such as the initial jobless claims, the ADP private payroll report and the employment component of the ISM manufacturing and non-manufacturing all guided investors towards, today’s horrendous reading.