The Australian dollar hit its lowest point since July, falling sharply on Thursday as traders adjusted their expectations for future interest rate hikes by the Reserve Bank of Australia. The currency dropped as much as 1.1% to reach $0.6894, underperforming all other Group of 10 currencies against the U.S. dollar.
The decline followed the release of domestic labor data, which revealed higher unemployment and job losses in the previous month. These signs of a weakening labor market reduced the likelihood of another rate increase from the central bank, dampening investor sentiment toward the Australian dollar.
Traders have been scaling back bets on future rate hikes, a shift that has put additional downward pressure on the currency. The Australian dollar's decline reflects broader concerns about economic softness, particularly in the labor market, which is a key indicator for monetary policy decisions.