Australian Economy and RBA Policy💱 Forex•AUD/USD

RBA Hawkishness Supports AUD Despite Mixed Jobs Data & USD Strength

February 20, 2026, 12:00 AM167 words10 sources
AUD/USD
The Australian Dollar (AUD) has shown resilience despite a mixed bag of January employment data and a strengthening US Dollar. While employment change fell short of expectations at 17.8K (vs. 20K forecast), full-time employment increased and the unemployment rate remained low at 4.1%, beating expectations of 4.2%. This robust labor market is increasing pressure on the Reserve Bank of Australia (RBA) to potentially continue its tightening policy to combat persistent inflation, as highlighted by Rabobank and supported by RBA Governor Bullock’s hawkish comments. The RBA recently raised its cash rate to 3.85%, widening the policy gap with the Bank of Japan and benefiting the AUD/JPY pair. However, the USD is gaining strength due to hawkish signals from the Federal Open Market Committee (FOMC), creating a narrow trading range for AUD/USD around 0.7050. Market flows into the AUD are increasing due to its carry appeal, but sustainability depends on the global risk environment. Concerns remain regarding the potential impact of further rate hikes on the Australian housing market.

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This article is based on analysis of 10 source articles from our news database.

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