April unemployment rise to 4.5% reduces RBA rate hike expectations for June, pressuring the Australian Dollar.
The Australian Dollar fell against the US Dollar, with AUD/USD trading near 0.7140 in Asian hours. The decline follows a jump in Australia’s unemployment rate to 4.5% in April, the highest since late 2021, weakening bets for a Reserve Bank of Australia rate hike in June.
Markets had priced in an 11.7% chance of a hike at the RBA’s next meeting, down from earlier expectations. The data adds to signs of cooling labor market conditions, giving the central bank room to pause its tightening cycle. Traders now await the Michigan Consumer Sentiment Index due later Friday.
Geopolitical tensions, including stalled Middle East negotiations, provided limited support for the USD. Iranian officials noted progress but cited uranium enrichment and Strait of Hormuz control as unresolved issues.