The Aussie dollar is sitting at 88.08 cents this morning but traded down to its lowest level since August 2010 yesterday after much weaker than expected employment data showed 22,600 jobs were lost.
Interest rate markets repriced the chance of an RBA rate cut into the futures curve yesterday as a result of the weak employment. For FX traders, particularly those offshore, the data simply highlighted the difficultly facing the Australian economy at the moment.
Uncertainty is poison to investors and traders, so with better investment opportunities in other markets, traders are exiting longs and actively selling.
It has stabilised since – making a low of 87.73 cents – but given it traded all the way up 0.9085 on Monday, the bulls will not be happy and the bears are firmly in control at the moment.
Glenn Stevens might get his 85 cent level fairly soon after all.