AUD/USD Slumps, ASX Hits Record as RBA Rate Cut Bets Rise After Soft Jobs Data

Australia’s employment report gave doves exactly what they’d been waiting for, with unemployment jumping to its highest level since December 2021 and full-time jobs falling by 38k. This builds the case for an RBA rate cut in August—especially with inflation cooling and sentiment weakening across consumers and businesses. Traders are now fully focused on Q2 CPI due July 30, which may be the final piece of the puzzle.

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RBA Rate Cut Bets Rise After Weak Jobs Report as AUD Falls and ASX Rallies

Australia’s employment report gave doves the weak numbers they’d been waiting for, with unemployment rising to its highest level since December 2021 and full-time jobs falling by 38k. It hadn’t come without warning either, with sluggish growth, soft consumer and business sentiment, and monthly inflation readings comfortably within the RBA’s 2–3% target band.

To be fair, had the RBA cut last week, it would have made no difference to June’s employment figures. But the recent monthly inflation figures already told us what we needed to know - the RBA needed to cut. And while 4.3% unemployment is chump change to anyone who has actually witnessed a real recession first hand, that is a nice uptrend on AU's unemployment rate. 

Ultimately, the Reserve Bank of Australia (RBA) RBA could have a cut in July but decided to wait, and they may as well cut in August instead. Only a hot Q2 CPI on July 30 could stop them—and that feels unlikely.

Australian unemployment rose to 4.3% in June 2025, an 18-month high, while full-time jobs dropped by 38,200—fuelling expectations for an August RBA (Reserve Bank of Australia) rate cut. Australian Bureau of Statistics (ABS), London Stock Exchange Group (LSEG). 

Australian Bureau of Statistics (ABS), London Stock Exchange Group (LSEG)

 

 

 

Markets Reprice RBA Cut: AUD/USD Slides, ASX Hits Record, Yields Drop

RBA cash rate futures are now implying a 68% chance of an August cut, or a 52% chance of a 50bp cut. A 50bp move would take the overnight cash rate (OCR) to 3.35%, and that may not be so far-fetched considering the RBA contemplated a jumbo cut back in May. The case for such a move strengthens considerably if Q2 CPI data (due 30 July) shows a meaningful drop.

•    Australian yields were broadly lower, with the 3-year yield down 7bp to 3.37%.
•    The ASX 200 defied my bearish lean to close at a record high (because bad news is clearly good news—so long as it’s not too bad).
•    The Australian dollar was Thursday’s weakest major, with AUD/USD falling to a 3-week low and closing below 0.50 on revived RBA cut bets.

Chart analysis by Matt Simpson - Source: TradingView, S&P/ASX 200 Index

 

Australian Dollar Technical Analysis

The Aussie dollar had mostly benefited from Trump’s tariffs being scaled back and the RBA pushing back on rate cuts. But that tariff theme is worn out beyond belief, and the Australian dollar looks rather elevated considering the RBA may finally be forced to cut—especially with the Federal Reserve (Fed) now likely to hold rates higher for longer.

Chart analysis by Matt Simpson - data source: TradingView | Pairs AUD/USD, AUD/JPY, AUD/NZD, GBP/AUD

 

AUD/JPY Technical Analysis: Australian Dollar vs Japanese Yen

AUD/JPY is perhaps the only compelling long for Australian dollar bulls—but even that’s debatable. Pairing weak with weak isn’t always a great trade, especially with crosses like CHF/JPY leading the charge against the yen.

Still, AUD/JPY has carved out a decent uptrend on the daily chart and just experienced an orderly 2-day pullback. Prices remain above the March and May highs, and any further dip may tempt bulls to take another punt in what remains a weak Japanese yen environment.

 

AUD/NZD Technical Analysis: Australian Dollar vs New Zealand Dollar

We’ve likely seen a swing high form on the AUD/NZD daily chart, with Thursday’s bearish engulfing candle closing below the 200-day EMA. That said, the broader trend remains bullish, so this could simply be a retracement within the uptrend.

Support has emerged at the May high (1.0921). A break below that level brings the 200-day SMA (1.0949) and 1.0845 high into focus for bears.

 

GBP/AUD Technical Analysis: British Pound vs Australian Dollar

Even the struggling British pound is gaining ground against the flailing Aussie. Bullish momentum picked up on GBP/AUD after a false break of the May low and the pair is now eyeing a potential move above the 50-day EMA (2.0748).

Bulls may seek dips in anticipation of a move toward 2.10.

 

 

Economic Events in Focus (AEST / GMT+10)

09:30 JPY National CPI, Core CPI (Jun) (USD/JPY, EUR/JPY, AUD/JPY, Nikkei 225)

13:00 NZD Credit Card Spending (Jun) (NZD/USD, NZD/JPY, AUD/NZD)

16:00 EUR German PPI (Jun) (EUR/USD, EUR/JPY, EUR/GBP, EUR/CHF, DAX)

18:15 EUR German Buba Mauderer & President Nagel Speaks (EUR/USD, DAX)

19:00 EUR Construction Output (May) (EUR/USD, EUR/JPY, EUR/GBP, EUR/CHF, DAX)

22:30 USD Building Permits, Housing Starts (Jun) (USD, S&P 500, Dow Jones, Nasdaq 100, Gold, Crude Oil)

00:00 USD Michigan Inflation Expectations, Consumer Sentiment, Conditions (Jul) (USD, S&P 500)

01:30 USD Atlanta Fed GDPNow (USD, S&P 500)