Australian Dollar remains on the front foot after mixed jobs report; bulls lack conviction

AUD/USD attracts some dip-buyers following the overnight pullback from the weekly top.
The mixed Australian jobs data fails to provide any impetus to the Aussie or spot prices.
The Fed’s hawkish outlook acts as a tailwind for the USD and might cap gains for the pair.

Haresh Menghani FXStreet

The AUD/USD pair edges higher during the Asian session on Thursday and reverses a part of the previous day's retracement slide from the weekly high. Spot prices stick to modest gains around the 0.7035 area following the release of the mixed Australian jobs report, though the intraday uptick lacks bullish conviction amid a combination of negative factors.

According to the official data published by the Australian Bureau of Statistics (ABS), the Unemployment Rate rose to 4.3% in February from 4.1% in the previous month. The reading was above consensus estimates of 4.1%, though it was offset by above-expectation hiring. In fact, the Australian Employment Change arrived at 48.9K during the reported month, compared to 20.3K anticipated. This comes on top of the Reserve Bank of Australia's (RBA) hawkish signals earlier this week, which offer support to the Australian Dollar (AUD) and the AUD/USD pair.

Following the widely expected 25 basis points (bps) rate hike, the RBA said that there is a material risk that uncertainties in the Middle East would keep domestic inflation above target for longer than anticipated. Moreover, RBA Governor Michele Bullock stressed that the board was united in the cash rate needing to climb to combat inflation and argued that the close vote was more about the timing rather than the direction of policy settings. The current market pricing indicates that market participants expect the RBA to hike interest rates two more times this year.

Meanwhile, the US Federal Reserve (Fed) raised its 2026 growth projection and the year-end inflation outlook (PCE), citing risks from higher energy prices. Furthermore, the central bank projected only one rate cut this year and one in 2027. This, along with a further escalation of tensions in the Middle East, assists the US Dollar (USD) in preserving the previous day's strong gains and might cap the upside for the AUD/USD pair. Hence, it will be prudent to wait for a breakout through a short-term trading range before positioning for any further appreciation.

Economic Indicator

Unemployment Rate s.a.

The Unemployment Rate, released by the Australian Bureau of Statistics, is the number of unemployed workers divided by the total civilian labor force, expressed as a percentage. If the rate increases, it indicates a lack of expansion within the Australian labor market and a weakness within the Australian economy. A decrease in the figure is seen as bullish for the Australian Dollar (AUD), while an increase is seen as bearish.

Why it matters to traders?

The Australian Bureau of Statistics (ABS) publishes an overview of trends in the Australian labour market, with unemployment rate a closely watched indicator. It is released about 15 days after the month end and throws light on the overall economic conditions, as it is highly correlated to consumer spending and inflation. Despite the lagging nature of the indicator, it affects the Reserve Bank of Australia’s (RBA) interest rate decisions, in turn, moving the Australian dollar. Upbeat figure tends to be AUD positive.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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