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AUD/USD consolidates near 0.7000 as RBA hike bets near full pricing
Australia’s June jobs report beat expectations, keeping cash rate futures near a 4.60% year-end outcome but also raising the risk of a longer RBA pause.
AUD/USD is consolidating around 0.7000 after strong Australia employment data, according to FXStreet commentary citing Brown Brothers Harriman. The firm said solid June labor force gains keep expectations for the Reserve Bank of Australia, or RBA, rate hike cycle alive.
BBH’s Elias Haddad noted that Australia added more jobs than anticipated in June, with actual gains of 76.3k versus a 15.0k consensus, while full-time employment rose 29.3k and part-time employment increased 47.0k.
The unemployment rate stayed unchanged at 4.4% for a second month, while the participation rate rose 0.3 percentage points to near a one-year high of 67.0%. Haddad said that leaves the unemployment rate marginally above the RBA’s 4.2% projection.
Even so, BBH said cash rate futures are virtually fully pricing a 25 basis point hike to 4.60% by year-end, up from roughly 60% before the data. The note added that risks are skewed toward a more extended pause in the RBA tightening cycle, which could weigh on the Australian Dollar.