Aussie Dollar Pulls Back on Soft Jobs Data
The Australian dollar weakened to below $0.650 on Thursday, pulling back gains from the previous session, as weaker-than-expected labor data reinforced expectations of an RBA rate cut in August.
The Australian Bureau of Statistics reported that the unemployment rate rose to an over three-year high of 4.3% in June, ending its five-month hold and exceeding forecasts of 4.1%, while employment increased by just 2K, well below the expected 20K gain. The soft labor market print added to evidence of a slowing economy, strengthening the case for policy easing.
Markets are now pricing in an 89% chance of a 25bps rate cut at the central bank's August meeting, as policymakers weigh rising unemployment against subdued inflation.
Adding to the pressure, the dollar gained on rising Treasury yields that boost demand for US assets, but its advance was limited by concerns over Fed independence. President Trump later downplayed the likelihood of firing Fed Chair Powell, easing some market fears.
Source: Trading Economics
