Australian Dollar Falls After RBA Minutes, USD Gains on Pre-JOLTS Optimism

Australian Dollar Drops as RBA Minutes Signal Caution, USD Strengthens Ahead of JOLTS

June 3, 2025 – Forex Market Insight

The Australian Dollar (AUD) declined against the US Dollar (USD) on Tuesday after the RBA’s May meeting minutes pointed to a cautious policy stance. The AUD/USD pair retraced from its recent gains, trading lower ahead of the US JOLTS Job Openings report.

RBA Minutes Emphasize Prudent Approach

The Reserve Bank of Australia's minutes revealed the board favored a 25 basis point rate cut, indicating a preference for "prudent and persistent" policy easing rather than aggressive action. Policymakers acknowledged the threat posed by US trade policy to the global economy, though they noted that the direct impact on Australia remains limited for now.

Learn more: How RBA Policy Shifts Impact AUD/USD

China’s PMI Weakens, Adding Pressure

Adding to the AUD’s downside, the Caixin Manufacturing PMI from China fell to 48.3 in May, signaling contraction and dropping from April’s 50.4. Since China is Australia’s largest trading partner, weaker Chinese data tends to weigh on AUD sentiment.

US Dollar Recovers Despite Economic Concerns

Despite growing fears of stagflation in the US, the USD showed resilience, with markets positioning ahead of key labor market data. The JOLTS Job Openings report, due later today, could offer clues about hiring strength amid rising economic uncertainty.