The Australian dollar slipped to around $0.71, pulling back from a ten-week high hit in the previous session as weaker labor market data tempered expectations of another rate hike by the Reserve Bank of Australia. Employment fell by 15,800 in July, unwinding June’s upwardly revised gain of 80,300 and sharply missing forecasts for a 15,000 increase. It was the first monthly decline since April. At the same time, the jobless rate rose to 4.5%, slightly above both market expectations and June’s 4.4%, reaching its highest level in three months.
In its latest projections, the RBA forecast that unemployment will climb to 4.8% by mid-2028 and remain at that level through the second half of the year, above the government’s 4.5% forecast. While policymakers still characterize the labor market as relatively tight, recent figures indicate that employment growth and labor demand are gradually cooling. The RBA kept interest rates unchanged at its June and August meetings as it evaluates the impact of earlier policy tightening on economic activity.
