The Australian dollar tumbled on Thursday on fears a ban on the country's coal by a Chinese port would hurt its already slowing economy. The Aussie skidded almost 1 percent to $0.7086 on news China's northern Dalian port has put an indefinite ban on coal imports from Australia since the start of February. The ban comes amid simmering tensions between Beijing and Canberra over issues such as cyber security and China's influence in Pacific island nations. Australia recently revoked the visa of a prominent Chinese businessman, further straining ties.

The Aussie was already on the back foot after a major Australian bank forecast further policy easing despite strong jobs data earlier in the day. The Aussie dollar initially jumped almost half a cent to $0.7207 on Thursday's labour report, before falling back to $0.7155 after Westpac predicted interest rates would be cut in both August and November. The call on rates was boldly timed given the data showed jobs climbed 39,100 in January, more than twice the market forecast, while full-time employment surged 65,400.

The detail of the report was also robust with the jobless rate at a 7-1/2 year low of 5.0 percent, underemployment falling and healthy growth in hours worked. Across the Tasman, the New Zealand dollar too fell in sympathy to be last down 0.6 percent at $0.6812, breaking below crucial chart support at $0.6815. "Arguably full employment has been achieved and the risk is that employers will have to pay more to secure staff," said Craig James, chief economist at CommSec. "It means the Reserve Bank stays on the interest rate sidelines for an extended period."

Copyright Reuters, 2019