Aussie resumes losses on grim labor data

The Australian dollar weakened broadly in Asian trading on Thursday against a basket of global currencies, resuming losses after a temporary rebound against its US counterpart, and approaching a five-week low following weak Australian labor market data.

The data showed unemployment rising to its highest level in four and a half years, signaling that Australia’s labor market is beginning to feel the impact of the Iran war, a development that could encourage the Reserve Bank of Australia to remain cautious and leave interest rates unchanged in the near term.

Price Overview

• Australian dollar exchange rate today: The Australian dollar fell by around 0.7% against the US dollar to 0.7100, from the day’s opening level at 0.7149, after reaching an intraday high of 0.7157.

• The Australian dollar ended Wednesday’s session up around 0.65% against the US dollar, marking its second gain in three sessions, as part of a recovery attempt from a five-week low of 70.80 US cents.

• Aside from bargain buying at lower levels, the Australian dollar also found support from strong gains in US equities on Wall Street.

Australian labor market

Figures released Thursday by the Australian Bureau of Statistics showed net employment falling by 18,600 jobs in April, marking Australia’s first monthly job loss since November 2025, and coming in far worse than market expectations for an increase of 16,700 jobs. In March, employment had risen by 23,300 jobs after an upward revision from a previously reported gain of 17,900.

Government data also showed the unemployment rate rising to 4.5%, the highest level since November 2021, above market expectations of 4.3%, compared with 4.3% in March.

The data indicates easing tightness in Australia’s labor market, reducing pressure on policymakers at the Reserve Bank of Australia and reinforcing expectations that Australian interest rates will remain unchanged for as long as possible this year.

Australian interest rates

• Following the release of the data, market pricing for a 25 basis point rate hike by the Reserve Bank of Australia in June dropped sharply from 25% to 5%.

• Investors are now awaiting additional data on inflation, unemployment, and wage growth in Australia to reassess those expectations.

Opinions and analysis

Krishna Bhimavarapu, economist at State Street Global Advisors, said: “Today’s sharp rise in the unemployment rate suggests labor market conditions may be shifting faster than expected, reinforcing the Reserve Bank of Australia’s inclination to keep monetary policy unchanged in June.”

Harry Murphy Cruise, economist at Oxford Economics Australia, said the figures likely reflect economic conditions before the war, noting that companies’ hiring decisions usually lag behind broader economic shocks.