Australian Dollar Climbs on Strong Jobs Data

2026-07-23 02:20 By Joshua Ferrer 1 min. read

The Australian dollar rose above $0.70, reaching a five-week high as a stronger-than-expected labor market report reinforced expectations of another interest rate hike.

Net employment surged by 76,300 in June, the biggest increase since April last year and far above forecasts of a 15,300 gain, while the unemployment rate held at 4.4% as expected, with the participation rate rising to a one-year high of 67%.

The upbeat data reinforced signs of tight labor conditions and prompted markets to boost the odds of another rate hike by year-end to 90%, up from 78% previously.

Combined with higher oil prices amid renewed fighting in the Middle East, the strong jobs report added to uncertainty over the inflation outlook and increased pressure on the Reserve Bank of Australia to keep policy restrictive.

Investors now await second-quarter inflation data due next week, with core inflation expected to accelerate to 3.7% annually from 3.5%, remaining well above the central bank's 2%-3% target band.



News Stream
Australian Dollar Climbs on Strong Jobs Data
The Australian dollar rose above $0.70, reaching a five-week high as a stronger-than-expected labor market report reinforced expectations of another interest rate hike. Net employment surged by 76,300 in June, the biggest increase since April last year and far above forecasts of a 15,300 gain, while the unemployment rate held at 4.4% as expected, with the participation rate rising to a one-year high of 67%. The upbeat data reinforced signs of tight labor conditions and prompted markets to boost the odds of another rate hike by year-end to 90%, up from 78% previously. Combined with higher oil prices amid renewed fighting in the Middle East, the strong jobs report added to uncertainty over the inflation outlook and increased pressure on the Reserve Bank of Australia to keep policy restrictive. Investors now await second-quarter inflation data due next week, with core inflation expected to accelerate to 3.7% annually from 3.5%, remaining well above the central bank's 2%-3% target band.
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The Australian dollar rose to around $0.70, hitting more than a four-week high as the ongoing US-Iran conflict raised the risk of energy-driven inflation, fueling expectations that the Reserve Bank of Australia could deliver another interest rate hike. US attacks on Iran entered a tenth consecutive day, while Iran-backed Houthi militants announced a maritime embargo against Saudi Arabia, raising fears of broader disruptions to global energy supplies. The resulting surge in oil prices reinforced bets that the Reserve Bank could tighten policy further after raising the cash rate three times to 4.35%, with markets pricing an 80% chance of another increase by December. Investors now await Australia's June employment report on Thursday, with forecasts pointing to a 15,000 rise in employment and an unchanged 4.4% unemployment rate. Second quarter inflation data are also due next week, with core inflation expected to accelerate to 3.7% annually from 3.5%, well above the RBA's target band.
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