Turning focus to the AUD/USD pair, recent labor market and inflation data have clouded the RBA’s policy outlook.
Job vacancies fell 2.7% in the three months to August 2025 as private sector job vacancies declined 3.4%. Furthermore, the number of unemployed persons per job vacancy rose from 1.9 to 2.0, the highest level since February 2021.
The numbers were in line with the recent labor market report. Employment fell 5.4k month-on-month in August, and the participation rate dropped from 67% to 66.8%.
While labor market data is signaling a cooling, inflation could potentially be moving in the opposite direction. The Monthly CPI Indicator showed the annual inflation rate rose from 2.8% in July to 3% in August, the top end of the RBA’s 2-3% target range.
While rising inflation has reduced immediate market confidence in a November RBA rate cut, economists such as Dr. Shane Oliver still expect cuts due to broader economic headwinds. Dr. Shane Oliver recently commented on the potential influence of the Fed, stating:
“And if the Fed continues to cut because of a weakening US jobs market, it may also add to pressure for more rate cuts here, as weaker US growth will impact global and Australian growth. Our base case remains for 0.25% RBA rate cuts in November, February, and May.”
AUD/USD: Key Scenarios to Watch
Bearish AUD/USD Scenario: Dovish RBA rhetoric may drag AUD/USD toward $0.65.
Bullish AUD/USD Scenario: Hawkish RBA cues could send AUD/USD toward $0.66.
