Australia’s unemployment rate rose to 4.5% in July as employment fell by 15.8K, weakening RBA rate hike bets and pressuring the AUD.
The AUD/JPY cross saw limited selling pressure after Australia’s July jobs report showed a sharper-than-expected decline in employment. The unemployment rate climbed to 4.5% from 4.4%, while employment fell by 15.8K, missing forecasts for a 15K increase and reversing June’s 76.3K gain.
The data follows softer Q2 CPI inflation, prompting traders to scale back expectations for an immediate Reserve Bank of Australia rate hike. Market pricing now reflects just 12 bps of tightening over a three-month horizon, down from earlier bets. Analysts cite weaker Chinese demand for Australian commodities and a softer domestic economy as headwinds for the AUD.
Despite the weak data, the AUD/JPY pair held above its weekly low, trading near 112.75 with modest gains. The JPY faced separate pressure from disappointing domestic trade figures, limiting the cross’s downside.