US Treasury Intervention Boosts Aussie and Kiwi Dollars

The Australian and New Zealand dollars have gained ground following the US Treasury's surprise intervention in the bond market, which has weakened the greenback.

This move saw the Aussie dollar climb to near multi-week highs on Thursday, but it did take a slight knock after employment data showed a 15,800 decline in June, contrary to expectations of a 15,000 gain. The jobless rate also rose to a nearly five-year peak of 4.5%, suggesting some loosening in the labor market.

This development has been seen as a relief for the Reserve Bank of Australia (RBA), which had warned that interest rates might need to rise again if inflation does not cool as hoped, despite having already hiked three times this year.

Abhijit Surya, a senior APAC economist at Capital Economics, noted that 'today's figures suggest that the labour market is indeed softening, as the RBA had hoped to see.' However, he also added that 'the data may not be weak enough just yet for the Board to dial back its tightening bias.'