The Australian dollar rallied in Asian trade on Thursday against a basket of major rivals, extending gains for the second day against its US counterpart, and becoming the best performing major currency following strong employment data.

The data shows that the Australian labor market remains tight, increasing pressure on the Reserve Bank of Australia to maintain constrictive monetary policies for an extended duration this year.

AUD/USD

AUD/USD rose 0.6% to 0.6628, the highest in a week, after climbing 0.8% on Wednesday, the first profit in five days and the largest since early March as the greenback lost ground following the Federal Reserves policy meeting.

Performing Currencies

The Aussie was the best performing G8 currency today, rallying against most major rivals.

The Aussie rose 0.6% against the US dollar, and 0.5% against the euro, and 0.55% against the pound, and 0.5% against the Swiss franc.

It also jumped 0.35% against the ten, extending gains for the fifth straight session and scaling a ten-year peak at 99.99.

Australian Labor Market

Government data showed net employment rose by 116.5 thousand in February, the best rate since November 2021, and beating estimates of 39.7 thousand.

The data also showed unemployment down to 3.7%, the lowest rate since 2023, and below estimates of 4.0%.

The data showcases the strength of the US labor market, and the likely necessity to maintain ultra-constrictive monetary conditions to control potential inflation.