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Australian dollar slides after weak labor data
July unemployment ticked up to 4.5% and employment change swung to a 15.8K jobs drop, while Fed hike odds eased to a 32.7% probability next meeting.
The Australian dollar weakened against the US dollar after Australia’s labor-market report came in soft, with AUD/USD turning down to around 0.7120 in Asian trading.
Australia’s unemployment rate rose to 4.5% in July, above the 4.4% market expectation, and employment change fell by 15.8K jobs, sharply reversing June’s 80.2K gain and underscoring weaker labor momentum.
Market strategists at Rabobank said expectations for further Reserve Bank of Australia tightening remain limited, with their view pointing to headwinds such as weaker Chinese demand for Australian commodities and a softer domestic economic backdrop.
The article also notes that downside pressure in AUD/USD may be tempered by a softer US dollar, as recent economic data and Federal Reserve policy expectations have cooled, with CME FedWatch Tool pricing a 32.7% chance of a Fed rate hike at the next meeting, down from 47% a month ago.