Aussie dollar investors were surprised by the publication of a weak jobs report in January in response to the central bank's aggressive tightening measures.
The Australian Bureau of Statistics (ABS) reported on Thursday, that the unemployment rate rose to 3.7% in January from 3.5% recorded in December.
This figure was the highest in 8 months, seeing the number of unemployed jump by 21,900 to 523,200.
In addition, the data also showed net employment fell by 11,500 last month compared to expectations for an increase of 19,800 people.
The impact of the data, the Aussie dollar plunged sharply to the lowest level of 0.6868 before returning to erase losses due to the decline of the US dollar in the Asian session.
With the job market seen to be slowing, the Reserve Bank of Australia (RBA) may need to tread carefully on further interest rate hikes.
This is because the inflation rate in the country is still high where data released last month showed that consumer prices in the fourth quarter were at their highest peak in 33 years.
