The Australian (AUD) and New Zealand Dollar (NZD) overnight both took a hit, following poor respective key economic data releases from both countries.
Firstly in Australia; the country’s unemployment rate jumped to the highest in around two decades in May, with nearly a quarter of a million people losing their jobs due to the coronavirus pandemic-driven shutdowns.
Employment in May dropped a further 227,700 following last month’s record slump of some 600,000 in April, according to figures from the Australian Bureau of Statistics (ABS). The unemployment rate jumped up to 7.1%, the highest since October 2001, from 6.4% in April.
Elsewhere, with New Zealand; the economy shrank 1.6% in the March quarter, marking the biggest drop in 29 years and the first quarterly fall since December 2010, due to the initial impacts of the coronavirus curbs being felt.
What does this mean for AUD and NZD?
AUD and NZD came under some selling pressure following these data releases, however a slight pullback has been observed in the European session. There were some comments from a Chinese CDC expert saying that Beijing coronavirus has been contained, it helped the riskier FX and pushed USD back south for now.
Despite the above, we remain cautiously bearish on both AUD and NZD, any rallies/pullbacks to be sold, given the large risks that remain globally. In addition to the clearly economic slowdowns also mentioned for each country.
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