It looks like it is all doom and gloom in Asian trade today thanks to a couple of numbers that have really hurt the two major currencies.

The Aussie jobs report is out and while we saw an uptick in the number of jobs created, the unemployment rate has also crept higher to 5.3%. The reason this matters so much is that the RBA have made it very clear that they will be keeping interest rates low for an extended period until the jobs situation improves.

They’ve been targeting the 5.0% mark as a line in the sand and ideally they want the rate closer to 4.5%. That looks a long way off at the moment and given that it has ticked higher this month, the odds of another rate cut in October are increasing my the minute.

What that means is the OCR will now likely drop under 1.0%, but whether we see a 25bp cut is yet to be determined.

On a technical level, we’ve seen the 0.6800 drop and that could open the door to some further selling. The hawkish update from the FOMC will also likely see the USD gain against the other majors and that will keep the pressure on the AUD/USD.

Kiwi GDP

We’ve also seen GDP out of NZ released very early this morning and while the initial response was positive, those gains have evaporated and then some.

The situation here is that while the GDP print was reasonable, it is still not going to be enough to please the RBNZ, so the odds of another cut are also jumping today.

The NZD/USD has fallen away and is also testing key support at 0.6300. In much the same fashion as the Aussie, if that level drops and the USD stays bid, we could see a sharp fall in the coming sessions.

Overall it has been a bearish morning in Asian trade and perhaps even a bit of a game changer.