Australian Dollar Falls on Weak Jobs Data

The Australian dollar fell below $0.70, moving toward July levels hit early this month, after higher unemployment and unexpected job cuts in September prompted traders to scale back bets on further rate hikes. The jobless rate came in at 4.7%, above the 4.6% forecast, while the previous month's reading was revised up from an initial 4.6%. The economy also shed 39,300 jobs, the biggest monthly fall since February last year, compared with expectations for a 20,000 gain. The figures suggested the labor market may be loosening after the Reserve Bank of Australia raised its cash rate by 1 percentage point to 4.60% this year to rein in inflation, marking one of the most aggressive tightening cycles among developed economies. Markets now see less than a 20% chance of a November hike, down from 35% earlier in the day, while the odds of a December move fell to 40% from 60%. A May 2027 hike carries the highest implied probability at 80%. Attention now turns to Q3 CPI data due later this month.

The Australian dollar edged up to around US$0.70, reaching its highest level in more than two weeks as hawkish RBA signals and a broadly weaker US dollar supported the currency. Minutes from the Reserve Bank latest meeting highlighted persistent cost-of-living pressures and the risk of further price increases, keeping the door open for additional rate hikes. Markets are pricing in a 28% chance of another rate increase at the November 3 meeting and about 50% odds of a December move. Focus now turns to employment data due Thursday, with the economy expected to add 20,000 jobs, down from 39,500 in August, while the unemployment rate is forecast to hold steady at 4.6%. Third-quarter CPI data will also take center stage later this month, with core inflation risks remaining elevated above the RBA's 2%–3% target range. Meanwhile, the Aussie drew further support from a weaker US dollar after the Federal Reserve signaled only one more rate hike this year, but no further tightening in 2027.

The Australian dollar traded below $0.70, near multi-month lows as investors assessed minutes from the Reserve Bank of Australia’s September meeting. The central bank warned that several upside risks to inflation identified earlier had materialized or were building, adding that further cash rate increases remained possible if needed. Markets are now watching November’s meeting, with a fifth rate hike this year on the table if upcoming third-quarter inflation data show persistent price pressures. The RBA also highlighted rising global costs, escalating Middle East tensions and oil prices above levels assumed in its August forecasts as key inflation risks. Attention now turns to the September employment report due Thursday and the Q3 CPI data expected later this month for clues on the RBA’s next move. Meanwhile, the US dollar climbed to an 18-month high, fueled by safe-haven demand as geopolitical risks rose after renewed attacks on energy infrastructure in the Middle ?East and Ukraine.