Australian dollar slides
The Australian dollar continues to slide Tuesday, buying 69.73 US cents from 69.86 US cents on Monday.
Yesterday, the local currency has fallen, buying 69.83 US cents from 70.17 US cents on Friday.
Last Friday, it was at 70.23 US cents from 70.34 US cents on Thursday.
On Thursday, the Aussie firmed to two-month highs as market wagered on ever more easing from central banks in the United States and Europe, driving Treasury yields to their lowest since late 2016.
The Aussie popped up to 70.34 US cents, having climbed 0.5 per cent overnight and away from a 69.56 US cent low touched early in the week.
The gains came as investors bet the new head of the European Central Bank, Christine Lagarde, would take a dovish stance on policy and that took euro zone yields to all-time lows.
Lagarde’s appointment also fuelled expectations of policy easing globally, with the market again nudging up the probability of a half-point cut in rates from the Federal Reserve this month.
The US dollar took an added blow when President Donald Trump repeated his call for the United States to match efforts by China and Europe to manipulate currencies and pump money into their economies.
All of which helped offset some disappointing economic data at home, with Australian retail sales edging up just 0.1 per cent in May, after a surprise 0.1 per cent drop in April.
Just as bad was a 1.1 per cent drop in jobs vacancies in the three months to May, the first fall since mid-2016.
This series used to be cited by the Reserve Bank of Australia as a reason for optimism on jobs growth, so the pullback was worrying.
“This will likely see employment growth slow in the months ahead and put upward pressure on the unemployment rate,” said Tapas Strickland, a director of economics at NAB.
“We expect unemployment to rise moderately in 2019 and force the RBA to cut rates further.”
The central bank has already eased this month and last, taking the cash rate to a record low of 1.0 per cent.
Futures imply a 92 per cent chance rates will be down at 0.75 per cent by Christmas.
Yields on three-year bonds are likewise tipping an easing at 0.94 per cent.
The 10-year futures contract nudged down 2.0 ticks on Thursday to 98.6950, but that was just a whisker off its record peak.
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