FX.co ★ Aussie Dollar Declines Amid Weak Labor Data

The Australian dollar experienced a decline to approximately $0.648 on Thursday, erasing the substantial gains achieved in the previous session. This movement followed the release of labor market data that bolstered the argument for the Reserve Bank of Australia to consider easing monetary policy. Despite the unemployment rate holding steady at 4.1% for the third month in a row, mirroring market expectations, job statistics fell short. Total employment decreased by 2,500, bringing the figure to 14.62 million, which was contrary to projections of a 25,000 increase and marked the first monthly decline since February. Consequently, the markets are now factoring in an 80% likelihood that the Reserve Bank of Australia will reduce its key interest rate from 3.85% to 3.6% during its meeting on July 8, with expectations of two further cuts within the year. Externally, the Australian dollar faces additional pressure from a strengthening U.S. dollar due to the Federal Reserve's hawkish position. Although the Fed maintained current interest rates, it emphasized a cautious and data-dependent approach.