April unemployment in Australia rose to 4.5%, with employment falling by 18.6K, missing forecasts and weighing on RBA rate hike bets.
The Australian Dollar retreated toward a one-week low against the New Zealand Dollar on Thursday after April employment data disappointed. The unemployment rate climbed to 4.5% from 3.8%, while employment fell by 18.6K, defying expectations for a 17.5K gain and marking a sharp reversal from March’s 17.9K increase.
The weaker-than-expected figures have dampened expectations for further tightening by the Reserve Bank of Australia. Markets had previously priced in potential rate hikes, but the jobs report suggests cooling labor market conditions, reducing pressure on the RBA to act.
Meanwhile, the New Zealand Dollar found support from a more hawkish Reserve Bank of New Zealand stance. Investors now anticipate the RBNZ may maintain or even tighten policy to curb inflation, contrasting with the RBA’s outlook and adding downward pressure on AUD/NZD.