The Australian Dollar (AUD) edged higher during the Asian session on Thursday, reversing part of the previous day's retracement from its weekly high, following the release of a mixed Australian jobs report. The AUD/USD pair traded around 0.7035, with spot prices showing modest gains but lacking strong bullish conviction due to a combination of negative factors and market uncertainty [1].
Official data from the Australian Bureau of Statistics (ABS) revealed that the Unemployment Rate rose to 4.3% in February, up from 4.1% in January and above the consensus estimate of 4.1% [1][2]. However, this was offset by a stronger-than-expected Employment Change, which came in at 48.9K for February, compared to the anticipated 20.3K and a revised 26.1K in January [1][2]. The participation rate also increased to 66.9% [2]. Notably, Full-Time Employment decreased by 30.5K, while Part-Time Employment surged by 79.4K, with more people aged 65 and over moving into part-time roles [2]. Sean Crick, ABS head of labour statistics, highlighted that fewer people who were unemployed and waiting to start a job in January moved into employment in February compared to recent years, and fewer people are leaving jobs to retire compared to a year ago [2].
The Reserve Bank of Australia (RBA) had delivered a widely expected 25 basis points rate hike earlier in the week, with Governor Michele Bullock emphasizing the board's unity on the need for higher rates to combat inflation. The RBA warned of material risks that uncertainties in the Middle East could keep domestic inflation above target for longer than anticipated, and market pricing suggests expectations for two more rate hikes this year [1].
Market reaction to the employment data was muted, with the AUD/USD pair trading 0.09% higher on the day at 0.7030 [2]. The Australian Dollar was the weakest major currency against the Euro this week, according to a currency heat map [2]. Meanwhile, the US Federal Reserve (Fed) held rates steady at 3.50%-3.75% and raised its 2026 growth and inflation projections, projecting only one rate cut this year and one in 2027, which, along with Middle East tensions, supported the US Dollar and capped AUD gains [1][3][4].
No explicit forward-looking analyst opinions were provided in the sources, but the RBA's hawkish stance and market expectations for further rate hikes suggest ongoing focus on inflation and labor market data [1].
CONCLUSION
The Australian Dollar showed resilience after a mixed jobs report, with strong hiring offsetting a higher unemployment rate. The RBA's hawkish tone and expectations for further rate hikes provided support, but gains were limited by global uncertainties and a firm US Dollar. Market participants remain attentive to upcoming data and central bank signals for future direction.