The Australian dollar has had a wild ride over the last few days which started on Wednesday after the latest interest rates decision by the US Federal Reserve where the central bank hiked rates by 25 basis points.

The news was already factored into the market so it was the following statement that grabbed everybody’s attention and when the speech turned out to be less bullish than expected, the Aussie dollar soared as the market scaled back expectations for the amount of rate hikes the Fed would deliver this year.

Then on Thursday data out of Australia showed the unemployment rate climbing to 5.6 percent which was followed later in the day by an announcement from US President Donald Trump that he would slap additional tariffs in $50 billion worth of goods from China.

The uptick in the unemployment rate dashed any hopes of the Reserve Bank of Australia raising interest rates any time soon and the new tariffs spooked investors as China is Australia’s biggest trading partner and fears are prices will have to rise to offset the damage done to the economy by the tariffs.

The Australian dollar was quickly sold off on the news, giving up all of the previous day’s gains.

“The Australian employment report showed there was still plenty of labour market slack left in the economy,” said says Elias Haddad, Senior Currency Strategist at the Commonwealth Bank.
 

“Australia’s underemployment rate edged up 0.1 percentage points to 8.4% in February. This will limit a significant pick up in wages growth and limit upward revisions to Australian interest rate expectations.” He added.

Adding more woes to the Australian dollar was the tumble in commodity prices and especially iron ore, the country’s biggest export which has now fallen over 10 percent in the last month alone.

Some predict more losses are on the cards as demand from China, the biggest buyer of the commodity cuts back orders.

“The rapid rise in steel stockpiles has markets worried,” said Viveh Dhar, Mining and Energy Commodities Analyst at the Commonwealth Bank.
 

“If steel demand doesn’t pick up in coming weeks, we could see iron ore prices fall further.” He added.

The Australian dollar has found its footing and stabilized today, but with trade tariffs, and potentially lower commodity prices hanging over its head, this situation may not last long.