The Australian dollar shed around a quarter US cent on Thursday after weaker-than-expected labour force data, retreating from a two-month high as expectations of an imminent monetary policy tightening faded.
The Aussie had rallied to around 72.40 cents in offshore trading, breaching this week's tough resistance at 72 cents, and giving it a seven percent advance since the eight-month low of 67.70 cents seen in June.
The AUD was $0.7214/19 compared with $0.7190/95 late here on Wednesday. June employment unexpectedly fell for a second month in a row in data released on Thursday, dropping 3,800 when expectations had centred on a rebound of 25,000.
This pushed the unemployment rate up to 5.6 percent when the market had expected it to stay at a 23-month low of 5.5 percent.
"The door should be slammed shut on any thoughts of an interest rate rise," said TD Securities chief strategist Stephen Koukoulas. Talk of another tightening by the Reserve Bank this year, even as early as August, has gathered pace recently after a run of strong data, particularly stubbornly high credit numbers.