Australian Dollar remains on the front foot after mixed jobs report; bulls lack conviction

• AUD/USD attracts some dip-buyers following the overnight pullback from the weekly top.
• The mixed Australian jobs data fails to provide any impetus to the Aussie or spot prices.
• The Fed’s hawkish outlook acts as a tailwind for the USD and might cap gains for the pair.

The AUD/USD pair edges higher during the Asian session on Thursday and reverses a part of the previous day's retracement slide from the weekly high. Spot prices stick to modest gains around the 0.7035 area following the release of the mixed Australian jobs report, though the intraday uptick lacks bullish conviction amid a combination of negative factors.

According to the official data published by the Australian Bureau of Statistics (ABS), the Unemployment Rate rose to 4.3% in February from 4.1% in the previous month. The reading was above consensus estimates of 4.1%, though it was offset by above-expectation hiring. In fact, the Australian Employment Change arrived at 48.9K during the reported month, compared to 20.3K anticipated. This comes on top of the Reserve Bank of Australia's (RBA) hawkish signals earlier this week, which offer support to the Australian Dollar (AUD) and the AUD/USD pair.

Following the widely expected 25 basis points (bps) rate hike, the RBA said that there is a material risk that uncertainties in the Middle East would keep domestic inflation above target for longer than anticipated. Moreover, RBA Governor Michele Bullock stressed that the board was united in the cash rate needing to climb to combat inflation and argued that the close vote was more about the timing rather than the direction of policy settings. The current market pricing indicates that market participants expect the RBA to hike interest rates two more times this year.

Meanwhile, the US Federal Reserve (Fed) raised its 2026 growth projection and the year-end inflation outlook (PCE), citing risks from higher energy prices. Furthermore, the central bank projected only one rate cut this year and one in 2027. This, along with a further escalation of tensions in the Middle East, assists the US Dollar (USD) in preserving the previous day's strong gains and might cap the upside for the AUD/USD pair. Hence, it will be prudent to wait for a breakout through a short-term trading range before positioning for any further appreciation.