Australian Dollar falls after weak employment statistics.

• The Australian dollar is set to decline as poor employment statistics bolster expectations for a rate cut by the RBA.
• New jobs in Australia increased by just 2,000 in June, far below the anticipated 20,000, and the unemployment rate climbed to 4.3%.
• Trump has announced he’ll send a notification about the forthcoming 10% tariff to over 150 nations through one letter.

The Australian Dollar (AUD) edged down against the US Dollar (USD) on Thursday, retracting gains from the prior day. The disappointing employment figures from Australia are likely to lead to further depreciation of the AUD/USD pair, intensifying the Reserve Bank of Australia (RBA)’s concerns.

According to the Australian Bureau of Statistics, the employment change for June was just 2,000, which is a recovery from May’s decline of 2,500. However, this was not close to the expected figure of 20,000. Additionally, the unemployment rate rose to 4.3%, surpassing the market expectation of 4.1%, up from 4.1% previously.

During a recent interview with Real America’s Voice, President Trump expressed his support, which initially boosted market sentiment. He mentioned that if the Federal Reserve Chairman Jerome Powell were to resign, it could shake up the market. Trump also hinted at a possible deal with Europe and noted it was premature to discuss Canadian tariffs, while stating that a tariff agreement with India is almost finalized.

Australian Dollar Weakens as US Dollar Gains Ahead of Retail Sales Data

• The US Dollar Index (DXY), gauging the dollar’s value against six major currencies, was up around 98.50. Attention is now on upcoming US retail sales for June and the weekly unemployment claims due later Thursday, along with the Philadelphia Fed’s manufacturing index.
• The US Producer Price Index (PPI) remained unchanged, contrary to market predictions of a 0.2% increase in June. Moreover, the core PPI saw a year-over-year rise of 2.6%, slightly below expectations of 3.0% while still higher than the anticipated 2.7%.
• Trump indicated plans to send a single notification to over 150 countries about the imposed 10% tariff. He clarified that these countries are smaller, unlike China and Japan, which have significant trade relations with the US. Trump also noted that the tariff rate could potentially increase to 15-20%, although specifics were not confirmed.
• The US Consumer Price Index (CPI) rose 2.7% year-on-year in June, aligning with expectations. The Core CPI was reported at 2.9%, slight under the 3.0% projection, still above the Federal Reserve’s 2% target, fueling concerns about ongoing inflation pressures.
• At a World Affairs Council event in San Antonio, Dallas Federal President Rory Logan suggested that the US Central Bank may need to maintain current rates for a while to keep inflation low in light of pressures from tariffs imposed by Trump’s administration.
• Trump warned of potential “very strict” tariffs on Russia if a peace agreement isn’t reached in 50 days, also cautioning about secondary tariffs on nations that import Russian oil. In partnership with NATO’s executive director, Trump affirmed that European allies would be purchasing billions in US weapons, set to assist Ukraine amid escalating Russian aggression.
• The US government has applied a 17% tariff on various fresh tomato imports from Mexico following unsuccessful negotiations to avert tariffs. Additionally, Trump announced a 30% tariff on imports from the EU and Mexico set to take effect August 1st. He has also proposed a general tariff increase to 15-20% across other trading partners, upping the existing 10% rate. The EU responded by delaying its retaliation against US tariffs until early August, aiming for a negotiated resolution.
• China’s economic growth for the second quarter was reported at an annual rate of 5.2%, missing the expected 5.4% but above the 5.1% market consensus. The country’s GDP grew by 1.1% this quarter, surpassing the anticipated 0.9%. Retail sales also showed a yearly increase of 4.8% in June, outpacing expectations of 5.6% while industrial production grew 6.8%, compared to a 5.6% forecast.
• Australia’s Westpac consumer confidence index rose 0.6% month-on-month in July, following a 0.5% increase in June. This marks the third consecutive monthly rise, signaling a slight improvement in consumer outlook.
• The AUD may continue to struggle as there’s an 80% likelihood of a rate cut from the RBA in August. The market anticipates a reduction of the 75 basis points by early 2026, though RBA Governor Michele Blok warns that rising labor costs and declining productivity could contribute to ongoing inflation risks.

Australian Dollar Drops Below 0.6500, Testing 50-Day EMA

The AUD/USD pair was trading around 0.6490 on Thursday. Technical analysis indicates a weakening bias as the pair has broken below a rising channel. Furthermore, the 14-day relative strength index (RSI) is positioned beneath the 50 mark, hinting at deteriorating market sentiment. The pair is currently below the nine-day index moving average (EMA), signaling weaker short-term price momentum.

On the downside, the pair tested the 50-day EMA at 0.6489, aligning with a three-week low at 0.6485. A drop below this level could weaken medium-term price momentum and push the pair toward the psychological threshold of 0.6400.

Should the AUD/USD pair reverse course and return to the channel, it may look to test the nine-day EMA at 0.6531. A breach above this point could enhance short-term price momentum and support the pair, potentially pushing it towards the eight-month high of 0.6595 reached on July 11th.

AUD/USD: Daily Charts