AUD/USD dives to three-week lows near 0.6560 after weak Australian employment data

• The Aussie Dollar plunged against the USD on Thursday as Australian unemployment grew to five-year highs.
• Market concerns about the uncertain global trade outlook are adding weight to the Aussie.
• Later today, the US Retail Sales and Jobless Claims figures will provide further clues on the economic impact of tariffs.

The Australian Dollar is one of the weakest performers of the G8 currencies on Thursday, hammered by a disappointing Australian Employment report and the overall risk-averse market, which is boosting demand for safe-haven assets, such as the US Dollar. 

The AUD/USD is trading 0.95% lower so far today and nearly 1.5% down on the week so far. The risk-sensitive Aussie is suffering from a mix of global trade uncertainty, a rush for safety amid growing speculation about the fate of US Chairman Powell, and weak Australian labour data.

Australian employment data boost hopes of another RBA cut

Data from the Australian Bureau of Statistics released earlier on Thursday revealed that the Unemployment Rate increased to 4.3% in June, its highest level in the last five years, against market expectations of a steady 4.1% reading.

The same report showed that net employment increased by only 2K, falling well below the market consensus of a 20K increase. May's data was revised up to a 1.1K decline from the previously estimated 2.5K drop.

These figures have boosted investors' bets for further rate cuts after the Reserve Bank of Australia's next monetary policy meeting, due on t¡August 11 and 12, and have increased negative pressure on the AUD.

The US Dollar, on the other hand, remains buoyed by the risk-averse sentiment amid the growing uncertainty about the global trade outlook, and rumours about Fed Powell's resignation. Later today, US Retail Sales and Jobless Claims figures will provide further guidance for US Dollar crosses.