Australian dollar slips after July employment falls

The Australian dollar weakened to around $0.71, retreating from a ten-week high reached in the previous session as softer labor market data reduced expectations of another RBA rate hike.

Employment fell by 15,800 in July, reversing June’s upwardly revised gain of 80,300 and defying forecasts for a 15,000 increase.

It marked the first monthly decline since April.

Meanwhile, the unemployment rate rose to 4.5%, slightly above both market expectations and June’s 4.4%, reaching its highest level in three months.

In its latest forecasts, the RBA projected unemployment would rise to 4.8% by mid-2028 and remain at that level through the second half of the year, above the government's 4.5% forecast.

While policymakers continue to view the labor market as relatively tight, recent data suggest employment growth and demand are gradually moderating.

The RBA recently held rates steady at its June and August meetings as it assessed the impact of earlier policy tightening on economic activity.