FX.co ★ Australian Dollar Slips on Softer Jobs Data

The Australian dollar dipped below $0.650 on Thursday, reversing gains from the previous session, following a jobs report that sparked renewed anticipation of a rate cut from the Reserve Bank of Australia (RBA). According to the Australian Bureau of Statistics, the unemployment rate surged beyond expectations to 4.5%, marking the highest level in nearly four years, alongside a modest employment increase of 14,900 — falling short of the 20,000 forecast. This data suggests further loosening in the labor market, leading to increased speculation that the RBA may resume rate cuts as soon as next month. Currently, investors estimate a 71% probability of a rate cut, a significant jump from the 40% likelihood prior to the report's release. The focus now shifts to the third-quarter inflation figures, expected within the next fortnight, which will be crucial in forming expectations for the RBA's policy meeting in November. Governor Michele Bullock previously highlighted that robust consumer spending and higher readings in select inflation sectors had led policymakers to reevaluate the necessity of further rate cuts.