AUD/USD Sets New 2022 Lows as the AU Labor Market Shows Signs of Cooling
AUD/USD Analysis
The Reserve Bank of Australia had kept rates unchanged at 4.1% earlier this month [1], marking the second straight hold and the third in this tightening cycle, which started in May 2022 and has produced 400 basis points of hikes.
Inflation moderated further to 6% y/y in the second quarter, while today's data showed signs of cooling in the labor market. Unemployment rose to 3.7% in July and 14.6K jobs were lost, in the biggest decline of the year.
This can help policymakers stay in the sidelines again and sent AUD/USD to the lowest levels since November, exposing it to 0.6271. The pair is also weighed by hawkish Fed minutes and fears around the Chinese economy and its property sector.
On the other hand, the RBA has kept the door open to more hikes, as inflation remains far from the 2-3% target and the labor market is still tight, despite signs of easing. As per Governor Lowe's comments from last week, "it is possible that some further tightening" will be needed to achieve that goal. [2]
AUD/USD finds some reprieve during the European hours, as the RSI hit oversold levels, which may give it the opportunity to rebound towards 0.6500. Under these conditions however, we struggle to see sustained recovery above that level and the EMA200 (at around 0.6620) looks distant.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 17 Aug 2023 https://www.rba.gov.au/media-releases/2023/mr-23-19.html | |
| Retrieved 15 Apr 2026 https://www.reuters.com/markets/australia-cbank-says-worst-over-inflation-policy-enters-calibration-stage-2023-08-11/ |
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