Australia’s Q2 wage growth matched forecasts at 3.2% y/y, easing private sector pressures and reducing RBA rate hike bets.
The Australian Dollar declined after Q2 wage growth rose 0.8% quarter-on-quarter, matching consensus and holding annual growth at 3.2%. The result fell short of the RBA’s 3.3% projection, with private sector wages easing to a four-year low of 3.1% y/y.
Annual wage growth has now held steady for three consecutive quarters, while public sector wages remained at 3.4% y/y. Markets still price a 60% chance of one final 25bps hike by year-end, though risks lean toward an extended pause as policy tightens.
Despite softer wage data, Australia’s carry appeal and commodity exposure remain supportive for the AUD, though near-term pressure persists amid cooling labor cost trends.