The Australian dollar rose after Australian labour market figures. Unemployment stayed at 4.3%, labour force participation fell by 0.1 percentage points, and about 18,000 jobs were added in March.
This job growth came despite weaker sentiment measures seen earlier in the week. A consumer survey showed expected unemployment at its highest level since the pandemic, while the employment measure in the Australia Industry Group business survey fell to its lowest level since 2020.
Consumer inflation expectations increased from 5.2% to 5.9% in April. Recent RBA rate rises were linked to softer sentiment alongside the Iran conflict.
Better economic data from China, Australia’s largest export customer, also supported the currency. Ongoing Iran conflict risks were described as keeping the chance of a pullback elevated.
The article states it was produced with help from an AI tool and checked by an editor.
Looking back at this time in 2025, we saw the Australian dollar holding firm thanks to a resilient jobs market. Now, in April 2026, the situation has shifted as the unemployment rate has edged up to 4.5%, according to the latest figures from the Australian Bureau of Statistics. This confirms the weak sentiment we saw bubbling up last year was a credible warning.
The Reserve Bank of Australia is in a difficult position, as the latest quarterly CPI data showed inflation remaining sticky at 3.8%, well above their target band. This persistence keeps the possibility of another rate hike on the table, which would normally support the Aussie. However, demand from China is mixed, with recent industrial production figures beating expectations but retail sales showing continued consumer caution.
This mix of signals suggests we should anticipate increased volatility in the AUD/USD pair over the coming weeks. For traders, this environment makes buying options more attractive than taking a simple directional bet. Purchasing straddles or strangles could be a sound strategy to profit from a significant price move in either direction, without needing to predict if the bulls or bears will win out.
Furthermore, the commodity landscape adds another layer of uncertainty, with iron ore prices having fallen over 15% since the start of the year due to China’s property sector concerns. While the direct conflict risks from last year have subsided, ongoing instability in key shipping lanes continues to pose a risk to global supply chains. These external factors are keeping a lid on any major rally for the Aussie dollar.
