The Australian dollar rose in Asian trading on Thursday against a basket of global currencies, attempting to recover from a two-month low against its US counterpart, with moderate buying activity emerging from lower levels following the release of positive Australian labour market data.

The data showed stronger-than-expected growth in new Australian jobs in May, while the unemployment rate retreated from a four-and-a-half-year high, indicating that Australia's labour market is beginning to regain momentum. This could pave the way for the Reserve Bank of Australia to raise interest rates again later this year.

The Price

• Australian dollar exchange rate today: The Australian dollar rose 0.2% against the US dollar to 0.6908, from today's opening level of 0.6894, and recorded a session low of 0.6888.

• The Australian dollar ended Wednesday's trading down about 0.25% against the US dollar, marking its third consecutive daily loss and touching a two-month low of 68.83 US cents, as investors continued to favour the US dollar as the most attractive available investment.

Australian labour market

Figures released by the Australian Bureau of Statistics on Thursday showed net employment increased by 40.3 thousand jobs in May, the strongest pace of job creation since February and above market expectations of a 31.2 thousand increase. In April, employment had declined by 40.7 thousand after being revised lower from a previously reported decline of 18.6 thousand.

Government data also showed the unemployment rate fell to 4.4%, in line with market expectations of 4.4%, after reaching 4.5% in April, its highest level since November 2021.

The data suggests tighter conditions may be returning quickly to Australia's labour market, potentially renewing pressure on policymakers at the Reserve Bank of Australia and strengthening expectations for another Australian interest rate hike later this year.

Australian interest rates

• Following the data release, market pricing for a 25-basis-point interest rate increase by the Reserve Bank of Australia in August remained around 20%.

• To reassess those expectations, investors are awaiting further Australian data on inflation, unemployment, and wages.

Opinions and analysis

Russell Chesler, Head of Investments at VanEck, said: "This is not the clear slowdown signal that markets were hoping for. For an economy that is supposedly losing momentum, Australians are still working and still spending."

He added: "We remain data dependent, but our view is that there could be another interest rate increase during this cycle."

Ethereum traded near the $1,672 level, according to market data from Crypto News, with the cryptocurrency falling 1.16% over the past 24 hours and 6.48% over the past seven days, while daily trading volume reached approximately $9.23 billion. Ethereum traded between $1,642 and $1,692 during the same period.

More hawkish Fed policy

At the same time, expectations for higher US interest rates have increased as Federal Reserve officials adopt a more hawkish tone amid continued economic strength.

Tensions surrounding the framework agreement between the United States and Iran have also supported demand for safe-haven assets after disagreements emerged over several key issues.

According to the CME FedWatch Tool, markets are currently pricing in a 36% probability of a Federal Reserve rate hike at the July meeting, up from 9% a week ago.

For September, the probability of a rate hike has climbed to more than 70%, compared with 29% previously.

The latest move has kept Ethereum below the $1,750 zone, an area traders have been monitoring since the cryptocurrency's February low. Analyst Dan Crypto Trades said Ethereum has repeatedly failed to break above this level and needs to establish a higher low before attempting another move higher.

Trader Dan Crypto Trades said: "Buyers need to try to form a higher low around this area and then break through it on the next attempt."

The zone is currently acting as a short-term test for buyers. If Ethereum fails to recover and hold above $1,750, the market could revisit the $1,500 area, which has already attracted attention from several analysts.

Ali Charts noted that Ethereum has moved below its 200-hour simple moving average. This signal often points to short-term trend weakness when price fails to reclaim the average quickly.

Cryptocurrency analyst Ali Martinez said: "Ethereum is now trading below the 200-hour simple moving average. As long as that level remains lost, I believe $1,580 remains the next major target."

ETF outflows and Iran risks weigh on Ethereum

According to data from SoSoValue, spot Ethereum ETFs recorded net outflows of $82.351 million yesterday, marking the fourth consecutive day of net withdrawals.

Those outflows added pressure on Ethereum as the cryptocurrency continues to struggle to maintain levels above short-term resistance.

As previously reported by Crypto News, Ethereum recently fell below the $1,700 level as ETF outflows, weak Relative Strength Index (RSI) readings, Iran-related risks, and declining derivatives activity weighed on market sentiment.

The report noted that traders remained cautious as both institutional flows and futures market activity weakened.

The broader global macroeconomic backdrop also remained tense. The Kobeissi Letter reported that US President Donald Trump criticized a Senate vote on Iran-related War Powers legislation, calling it "poorly timed and meaningless."

Geopolitical risks could reduce investor appetite for high-volatility assets, including cryptocurrencies, as traders shift toward safer positions.

Ethereum briefly reclaimed a resistance zone near $1,733 earlier this week after rebounding from $1,704, but the recovery failed to gain traction.

Since then, Ethereum has fallen back below the area that buyers needed to defend in order to maintain bullish momentum.

Gold prices fell to their lowest level in more than seven months on Wednesday after briefly dropping below the $4,000-per-ounce mark, pressured by a stronger US dollar and growing expectations for interest rate hikes.

Spot gold declined 2.9% to $3,981.21 per ounce after touching its lowest level since November 2025. US gold futures also fell 3.4% to settle at $4,008.80 per ounce.

The US dollar strengthened, making the precious metal, which is priced in the American currency, more expensive for holders of other currencies.

Interest rate hike expectations weigh on precious metals

Traders increased their bets on US interest rate hikes this year after the Federal Reserve adopted a hawkish tone at its latest policy meeting and as concerns persisted over inflationary pressures stemming from the war with Iran.

Tai Wong, an independent metals trader, said: "The market's pricing of a rate hike as early as September, driven by the Federal Reserve's hawkish stance, the dollar's rise to a 13-month high, and lower inflation expectations, are all placing significant pressure on precious metals."

He added: "For gold, there is support slightly below the $3,900 level, and central bank purchases remain ongoing, so a collapse is unlikely. However, an extended period of consolidation is possible because gold trading has currently moved out of the spotlight."

Gold becomes less attractive to investors when interest rates rise because it does not generate a yield.

Spot gold had reached a record high of $5,594.82 per ounce in late January but has since lost more than $1,600 per ounce.

Analysts at ING Group lowered their gold price forecasts and now expect gold to average $4,300 per ounce in the third quarter of 2026 and $4,600 in the fourth quarter, compared with their previous forecasts of $4,850 and $5,000 respectively.

Markets await US inflation data

Investors are also awaiting the release of the US Personal Consumption Expenditures (PCE) report on Thursday, the Federal Reserve's preferred inflation gauge, for further clues about the direction of monetary policy.

Lukman Otunuga, Senior Research Analyst at FXTM, said that additional hawkish signals from Federal Reserve officials or economic data supporting the need for higher interest rates could create further downside risks for gold.

As for other metals, spot silver fell 4.8% to $59.08 per ounce after hitting its lowest level since December 2025.

The closure of the Strait of Hormuz and the disruption of more than 10 million barrels per day of crude oil supplies from the Arabian Gulf have alerted import-dependent nations to the need for expanding their strategic and commercial storage capacity.

Many countries, particularly across the Asia-Pacific region, are seeking to build new storage facilities to strengthen energy security and avoid another major supply crisis like the one caused by the closure of one of the world's most important oil and LNG transit routes.

From India to Australia, energy importers are increasing their crude oil and fuel storage capabilities in preparation for the next energy crisis, amid an increasingly volatile geopolitical environment where disruptions are viewed as a question of "when" rather than "if."

Major oil producers are also considering expanding global storage facilities so they can continue marketing production during future disruptions that may shut down strategic trade routes.

The role of inventories in oil price movements

Before the conflict with Iran, most policymakers and analysts did not expect the Strait of Hormuz to become inaccessible to oil tankers.

Importing nations had long assumed that despite ongoing tensions in the Middle East, the strait would never actually close.

That assumption changed after shipping traffic was disrupted for nearly four months, while uncertainty over how quickly and smoothly the strait could reopen triggered an energy crisis across Asia, drained the US Strategic Petroleum Reserve to its lowest level since 1983, and pushed inventories at the WTI delivery hub in Cushing down to an operationally critical level of around 20 million barrels.

Expanding storage capacity could help reduce the impact of future supply shocks by limiting extreme price spikes during periods of disruption.

At the same time, filling those new storage facilities will require hundreds of millions of barrels of crude oil and refined fuels, creating additional demand in the short and medium term and supporting oil prices.

Inventory expansion plans

India, Singapore, Australia, and Pakistan are all seeking to strengthen their storage capacity to avoid future crises.

According to Reuters calculations, storage projects proposed in recent months could require roughly 500 million barrels of crude oil and fuels to fill the new facilities.

In addition, members of the International Energy Agency will need to rebuild approximately 400 million barrels that were released in March during the largest coordinated stockpile release in history.

Markets will also require additional barrels to offset current declines in global inventories amid strong seasonal summer demand.

Combining current and future inventory replenishment needs, additional demand could reach around one billion barrels of oil spread over several years, according to Reuters estimates.

That could help revive global oil demand beginning next year if shipping activity through the Strait of Hormuz returns to normal during the second half of this year.

India leads efforts to expand reserves

India is among the first countries moving to strengthen storage capacity. It is the world's third-largest crude oil importer but holds relatively modest reserves compared with China, which has accumulated more than one billion barrels of inventories.

India's underground strategic petroleum reserve capacity totals about 5.33 million metric tons of crude oil, equivalent to roughly 39 million barrels, enough to cover only around eight days of consumption.

The Hormuz crisis exposed India's vulnerability, prompting the government, according to reports, to ask state-owned ONGC to build and fill a new strategic reserve site at an estimated cost of $1.6 billion.

Pakistan, Singapore, and Australia boost storage

Pakistan is encouraging Gulf oil producers to establish strategic crude inventories in a planned energy city near Gwadar Port.

A Pakistani official told local media in May: "If crises such as war occur, Pakistan will have first rights to access these reserves."

Singapore, one of the world's largest oil trading hubs, said it is exploring underground storage solutions to increase fuel reserves.

Australia, meanwhile, remains unable to consistently maintain the International Energy Agency requirement of holding inventories equivalent to 90 days of consumption. The government plans to spend A$10 billion (about US$7 billion) to build larger fuel reserves.

During the recent crisis, Australia was forced to source jet fuel from China after global supply pressures intensified and one of its major refineries was shut down by a fire.

The Australian government is now seeking to establish a domestic fuel reserve by imposing minimum inventory requirements on companies while also expanding storage infrastructure through its diesel storage enhancement program.

Even producers want more storage

Plans to increase storage are not limited to importing countries.

Saudi Arabia, the world's largest crude oil exporter, is also considering expanding its global storage network.

Last week, Saudi Aramco Chairman Yasir Al-Rumayyan said the company already operates storage facilities around the world, particularly in Asia, adding: "We are seriously considering having larger storage facilities around the world."