The AUD/CHF currency pair was under pressure on Tuesday, as sentiment toward the Aussie deteriorated after weaker domestic labor market data coincided with renewed geopolitical tensions in the Middle East.
Australia’s latest employment figures surprised to the downside, undermining previous expectations that the Reserve Bank of Australia could consider further policy tightening in the near term.
Market participants scaled back projections for additional RBA rate hikes following an unexpected increase in the jobless rate. Australia’s unemployment rate rose to 4.5% in April from 4.3% in March, marking the highest level in roughly four and a half years.
In response to the data, the implied probability of a rate increase at the RBA’s next meeting fell sharply. According to financial market pricing provided by Westpac, the likelihood of a rate hike dropped to 3% from 13% prior to the release of the employment report.
Meanwhile, investor optimism over a potential US-Iran peace arrangement was curtailed by reports of new US strikes in the Middle East, which further pressured risk assets such as the Australian Dollar.
The US Central Command stated it had carried out fresh strikes on southern Iran, targeting Iranian missile sites and boats attempting to lay mines.
The US military said the operations were conducted in “self-defense” and were intended “to protect our troops from threats posed by Iranian forces.”
The renewed military activity reinforced a risk-off tone in global markets, favoring defensive currencies including the Franc.
The AUD/CHF currency pair was last down 0.16% on the day to trade at 0.5607.
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