Australian Dollar Retreats Sharply on Weak Jobs Data and Strong US Inflation
| Pair | Now | Since publish |
|---|---|---|
| AUDUSD | — | — |
- AUD/USD initially gained on RBA hawkishness, then fell.
- Strong US CPI (3.7% in September) boosted USD and Fed hike bets.
- Dismal Australian jobs data (-39.3K employed) crushed RBA hike expectations, sending AUD to multi-month lows.
The Australian Dollar (AUD) initially strengthened against the US Dollar (USD) on Tuesday, with AUD/USD trading around 0.7010 following hawkish signals from Reserve Bank of Australia (RBA) minutes and a softer US Dollar Index (DXY). However, this rally was short-lived as Wednesday’s release of stronger-than-expected US Consumer Price Index (CPI) data, showing annual inflation accelerating to 3.7% in September, bolstered expectations for further Federal Reserve (Fed) tightening and propelled the DXY towards 103.00, pushing AUD/USD back below 0.7000. The AUD then faced heavy selling pressure on Thursday after the Australian Bureau of Statistics (ABS) reported a decline of 39.3K employed people in September, reversing August’s gains and causing the unemployment rate to rise to 4.72%. This dismal jobs report significantly diminished RBA rate hike expectations, sending AUD/USD to a one-week low below 0.6950 and its lowest level since early July. By Friday, AUD/USD consolidated around 0.6920-0.6925 as markets awaited further cues on Fed policy.