Australian employment surged by 40.3K in May, beating forecasts, but the AUD remained flat as robust US economic data overshadowed the hawkish RBA signal.
The Australian Dollar showed no momentum Thursday despite a stronger-than-expected labor report. May employment rose by 40.3K, surpassing the 25K consensus and reversing the prior month’s contraction, while the unemployment rate dipped to 4.4% from 4.5%. The data reinforced expectations for a potential Reserve Bank of Australia rate hike in August.
Analysts had anticipated a rally, given the RBA’s 4.35% cash rate—well above the Fed’s 3.50%-3.75% range. However, the AUD remained stuck near its 200-day EMA at 0.6900, failing to capitalize on its yield advantage.
US economic strength countered the RBA’s hawkish signal. Q1 GDP was revised up to 2.1%, jobless claims fell to 215K, and core PCE inflation held at 3.4% YoY. The data dimmed hopes for Fed rate cuts and kept an October hike in play, pressuring higher-yielding currencies like the AUD.