AUD/USD slips after weak jobs data - BBH

AUD/USD is down near the lower-end of this month's 0.6440-0.6550 range. Australia's May labor force report was soft, BBH FX analysts report.

RBA has room to deliver more rate cuts

"The economy unexpectedly lost -2.5k jobs (consensus: +21.2) after adding 87.6k in April. The details were not that bad. Full-time jobs increased 38.7k vs. 58.6k in April while part-time jobs fell -41.1k vs. 29k in April. The unemployment rate was unchanged at 4.1% for a fifth consecutive month and is tracking below the RBA's June 4.2% projection."

"Leading indicators point to a weaker labor market. The NAB Employment subindex plunged to 0.4 (the lowest since January 2022) vs. 3.6 in April. Moreover, the Westpac-Melbourne Institute Unemployment Expectations subindex rose 5% to 127.4 in June, implying consumers expect unemployment to rise over the year ahead."

"The RBA has room to deliver more rate cuts. RBA cash rate futures imply 78% odds of a 25bps cut to 3.60% at the July 8 meeting and a total of between 75bps and 100bps of easing over the next 12 months."