Australian Dollar Slips on Middle East Tensions and Weak Jobs Data

Australian Dollar Slips on Middle East Tensions and Weak Jobs Data

The Australian Dollar (AUD) declined against the US Dollar (USD) on Thursday as the AUD/USD pair gave up prior gains. A combination of softer-than-expected employment data and mounting geopolitical risks has weighed heavily on the risk-sensitive Aussie.

Australia’s Labor Market Stalls in May

According to the Australian Bureau of Statistics (ABS), Employment Change in May declined by 2.5K, a sharp reversal from the upwardly revised 87.6K rise in April and below the expected 25K increase. On the flip side, the Unemployment Rate held steady at 4.1%, matching forecasts.

This divergence has raised questions over the momentum in Australia’s labor market and its potential influence on Reserve Bank of Australia (RBA) policy outlook.

Geopolitical Risk Hurts Risk Sentiment

Beyond domestic data, risk appetite deteriorated globally as Bloomberg reported the US is preparing a potential strike on Iran. Unnamed sources stated that US military plans are evolving, while the Wall Street Journal noted that President Trump had authorized a strike, only to pause pending further response from Tehran.

Related Read: US Dollar Index Surges as Fed Pauses and War Risks Rise

Fed Rate Hold Adds Pressure on AUD

The Federal Reserve maintained interest rates at 4.5% during its June meeting. Although expected, the hawkish tone from Fed Chair Jerome Powell further supported the Greenback, intensifying pressure on AUD/USD.

AUD/USD Technical Outlook

• Support Level: 0.6620
• Resistance Level: 0.6700
• Bias: Bearish short-term due to weak data and risk-off tone
• Key Focus: Upcoming Fed commentary, RBA rate expectations, and Middle East developments

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