The Australian dollar faced a massive selloff yesterday, due to surging risk-off sentiment triggered by Apple Inc.'s. Official statement The position of the Aussie today (19 / February) still tends to be depressed in the range of 0.6690s. Market participants look forward to the release of Australian employment data tomorrow morning to get directions for the next rate movement.

On Tuesday, Apple released a warning that its first-quarter sales target would fail. Because the impact of the Corona COVID-19 virus outbreak has hampered the supply of the global iPhone while dropping demand for Apple products in China. Apple's official statement instantly sent danger signals to all of Wall Street, which was followed by a sell-off on higher-risk assets.

The Australian Dollar and its neighbor, the New Zealand Dollar, both collapsed in this situation. His position began to stabilize in today's trading, following the release of Australian employee salary data which showed growth in line with expectations. However, the next move will be determined by the development of the COVID-19 outbreak and the release of Australian labor data tomorrow morning.

Said Petr Krpata of ING Bank, "Governor Lowe cited progress in the labor market as a factor key in RBA policy considerations so that rising unemployment can change expectations for interest rate cuts that are faster than current market calculations. "

Changes in Employment to Currency Exchange Rates

Trimming central bank interest rates usually results in a weakening of the exchange rates of related currencies, whereas an increase in interest rates will encourage the strengthening of the exchange rate. Also, the exchange rate of the Australian Dollar is influenced by the condition of the Chinese economy and the price of iron ore commodities which are now equally lethargic in Coronavirus outbreaks.

On Wednesday (20 / February), the Australian Department of Statistics publishes Employment Change data or employment changes which increased by 13.5k in January. This figure is better than the 10k forecast but decreases when compared to achieving 28.7k in the previous period.

The Employment Change data earlier this year was contributed by an increase in the number of jobs in the Full Employment category by 46.2k. The data rebounded after slumping 1.8k at the end of last year. On the other hand, the work of the Part-Time category experienced a significant decline of -32.7k.

At the same time, the unemployment rate for the January 2020 period was released with an increase from 5.1 percent to 5.3 percent. This is a significant increase while exceeding economists' expectations, which predicted an increase of just 5.2 percent.

Unemployment Increases, Australian Dollar Weakens

"Australia's unemployment rate is still in a stable trend since September 2019 ... there was a slight increase at the beginning of this year, it's just below the 2016-17 level," said ABS Chief Economist, Bruce Hockman.

The unemployment rate every month (Month-over-Month) remains stable in all states and other territories. It's just an increase in the Victoria region and a decrease in the South Australian region, including Tasmania. On the other hand, an increase in unemployment occurred in the New South Wales, Victoria, Queensland and Northern Territory regions.

Employment Change data, which was followed by an increase in the unemployment rate that was beyond expectations, made the Australian Dollar fail to gain momentum to strengthen against the US Dollar. In this trading session, the AUD / USD pair weakened sharply and is currently at the level of 0.6655, down 0.34 percent from the daily Open price.

Significant weakening experienced by the AUD this morning was triggered by the increasing prospect of RBA (Central Bank of Australia) rate cut. Previously, the market was waiting for the latest Australian employment data to weigh the outlook for changes in RBA interest rates in the next policy meeting.