16.04.202602:04:28UTC+00Australian Dollar Climbs Toward 2022 Highs

The Australian dollar climbed above $0.70, nearing its highest level since June 2022, after fresh labor market data reinforced the Reserve Bank’s view that conditions remain relatively tight. The unemployment rate was unchanged at 4.3% in March, while employment rose by 17.9 thousand, entirely driven by gains in full-time positions. This pointed to resilient labor demand despite the economic fallout from the conflict in the Middle East.

The data followed comments from Deputy Governor Andrew Hauser, who noted that inflation remains above target and that there is limited confidence current interest rates are restrictive enough. He signaled that rates may need to increase further, particularly as rising oil prices continue to stoke inflation. In response, markets and economists now broadly expect the RBA to deliver a third consecutive rate hike in May, which would lift the policy rate to 4.35% and effectively reverse last year’s easing.