Aussie hits one-week high after strong wages data

The Australian dollar rose in Asian trade on Wednesday against a basket of major rivals, expanding gains for the second straight session against the US dollar and hitting a week high, while approaching five-week highs following strong Australian wages data. 

The data renewed inflationary pressures on the Reserve Bank of Australia’s policymakers, which hurt the odds of a rate cut in May.

The Price

The AUD/USD price rose 0.3% today to $0.6487, the highest in a week, with a session-low at $0.6465.

The Aussie rose 1.55% on Tuesday against the greenback, marking the biggest profit since April 9, and approaching a five-month high at 65.15 cents.

Australian Wages

Earlier Sydney data showed Australian wages rose 3.4% y/y in the first quarter of 2025, compared to the previous quarter’s 3.2% rise, and passing estimates of a 3.2% increase.

On a quarterly basis, the seasonally-adjusted wages grew 0.9% in the first quarter, up from a 0.7% increase in the previous quarter.

Australian Rates

The wages data renewed inflationary pressures on the RBA policymakers before the May 20 meeting.

The RBA held interest rates unchanged at 4.1% at the previous April meeting but opened the door for a May rate cut.

The current odds of such a rate cut by the RBA in May currently stand at 75%.

The recent reduction of global trade tensions led analysts to reduce their expectations for Australian rate cuts this year.

The markets now expect the RBA to cut rates to 3.1% by the end of the year, up from 2.85% in previous forecasts.

Political Developments

Australia is enjoying political stability as the current Prime Minister Anthony Albanese gets sworn in for a second term, maintaining all major government positions unchanged.

Albanese is scheduled to attend Pope Leo XIV’s inauguration in Rome on Sunday, and there he will meet the European Commission President Ursula von der Leyen to discuss trade relations.