The Australian dollar is holding near the key 0.7000 level against the US dollar following robust employment figures released this week, according to Brown Brothers Harriman analyst Elias Haddad. Australia’s June jobs data exceeded expectations, reinforcing market confidence that the Reserve Bank of Australia will continue its tightening cycle. Cash rate futures markets have responded decisively, now pricing in an almost certain move to 4.60 percent by December, suggesting at least one more rate hike is locked in.
The strong labour market print removes a key obstacle for the RBA to maintain its hawkish stance despite global growth concerns. Traders are closely monitoring upcoming inflation data and retail sales figures for confirmation of the tightening path. The Australian dollar’s resilience near 0.7000 reflects growing divergence between RBA policy expectations and potential dovish pivots elsewhere, particularly as other central banks signal pause or slowdown in rate increases.
FXnCO Insight
Position for continued AUD strength against currencies tied to central banks nearing their terminal rates, with 0.7000 now acting as technical support.
Source: FXStreet