The Australian dollar will remain vulnerable to a further correction weaker despite the continuation of yield support.
The Australian dollar was unable to regain the 0.95 level against the US currency on Wednesday and had a significantly weaker tone on Thursday.
The domestic data offered no support for the currency with an employment decline of 19,700 for May compared with expectations of an increase of around 10,000 while the unemployment rate was also higher than expected at 4.3% which will reinforce fears over a significant slowdown in the economy.
Regional equity markets were also generally under pressure on Thursday which undermined the Australian currency and it weakened to below the 0.94 level against the US currency with a low near 0.9350 as the US currency secured wider gains. Yield support will continue for the local currency, but the net risks suggest that there will be a further Australian dollar correction weaker in the short term.