Quantcast

FOREX-Aussie whacked as jobs data raise rate cut bets, yen in demand


Shutterstock photo


* Fading hopes for trade deal, HK protests worry investors

* Euro edges higher, flirts with $1.13 level

* Aussie hurt by jobs data and prospect of rate cut

By Tommy Wilkes

LONDON, June 13 (Reuters) - The Australian dollar was thebig loser on Thursday after mixed employment data raisedexpectations for an interest rate cut, while investor nervesabout suspected attacks on two oil tankers in the Gulf of Omansupported demand for the Japanese yen.

The yen also rallied on Thursday as fading hopes for aU.S.-China trade deal at this month's G20 meeting, as well asmassive street protests in Hong Kong, drove investors intosafe-haven assets, although stock markets in Europe managed toclaw higher.

Reports of the attacks on two tankers, which sent crude oilprices soaring, added to the already-heightened tensions betweenIran and the United States. urn:newsml:reuters.com:*:nL4N23K1S2

The yen rose to as high as 108.16 yen per dollar JPY=EBS before settling at 108.44, up 0.1% on the day.

"You still have a lot of uncertainty when it comes togeopolitics," said Manuel Oliveri, analyst at Credit Agricole.

"The focus is shifting to the G20 meeting. Risk sentimentremains relatively unstable," he added, although cautioning thatexpectations for interest rate cuts by the U.S. Federal Reservewere keeping investor confidence from weakening further.

The Australian dollar, viewed as a barometer for globalinvestor sentiment, fell 0.3% to $0.6901AUD=D3 , a two-weeklow. Against the yen the Aussie tumbled half a percent to itsweakest since January before hitting 74.89 AUDJPY=EBS , down0.4%.

Mixed jobs data in Australia were taken as a green light foran early rate cut. Analysts noted that markets were pricing in a65% chance of a rate cut in July, and a more than 80% chance ofone by August and September. Australian government bond yieldsslid to record lows. urn:newsml:reuters.com:*:nL4N23K0W6

The dollar edged lower, the index hitting 96.965 .DXY after softer-than-expected inflation numbers published onWednesday. The greenback hit its lowest since late March onMonday as expectations grow that the Fed will soon cut rates.

The euro was little changed at $1.1287EUR=EBS .

"In our view, the Fed has blinked and rate cuts are comingfrom July. At the same time, the ECB (European Central Bank)lacks answers on what to do about the risk of a de-anchoring ofinflation expectations. The Fed-ECB monetary policy divergenceshould pave the way for a higher EUR/USD over the coming sixmonths," Danske Bank analysts said in a note.

The Swiss franc rose 0.2% to 1.1215 francs per euro EURCHF=EBS after the Swiss National Bank said it could furtherrelax its ultra-loose monetary policy but did not sound asconcerned about the economic outlook as some analysts hadexpected. urn:newsml:reuters.com:*:nL8N23K1O0

Sterling slipped, extending Wednesday's losses after Britishlawmakers defeated an attempt led by the opposition Labour Partyto try to block a no-deal Brexit. urn:newsml:reuters.com:*:nL8N23J56G

The pound was last down 0.1% at $1.2675GBP=D3 and 89.06pence per euro EURGBP=D3 . (Additional reporting by Shinichi Saoshiro in TokyoEditing by Mark Heinrich) ((thomas.wilkes@thomsonreuters.com))






This article appears in: Politics , Stocks , World Markets , Economy
Referenced Symbols: EFX ,



More from Reuters

Subscribe







See Reuters News













Research Brokers before you trade

Want to trade FX?