Australia’s unemployment rate stayed the same at 4.3% in November, which is better than the expected 4.4%. The Australian Employment Change fell by 21.3K, lower than the revised 42.2K drop in October, and did not meet the predicted increase of 20K. The participation rate also dropped to 66.7% from 66.9% in October. Full-time jobs decreased by 56.5K, while part-time jobs rose by 35.2K. The employment-to-population ratio went down by 0.2 percentage points to 63.8%. After these employment numbers were released, the Australian Dollar weakened. The AUD/USD pair was trading 0.26% lower at 0.6662. In the last week, the Australian Dollar showed the biggest decline against the Canadian Dollar. Labour market conditions are crucial for understanding economic health and can affect currency values. Tight labour markets may raise inflation and affect monetary policy due to wage pressures. Wage growth is important because it influences consumer spending and prices. Central banks pay close attention to it when making policy decisions. They consider employment levels alongside their mandates when assessing the economy and planning policy. Today is December 11, 2025, and this morning’s Australian jobs report signals important trends. Although the unemployment rate is steady at 4.3%, the details indicate a weakening labour market. The drop in full-time jobs by over 56,000 and the decrease in the participation rate suggest the economy is slowing down. This data puts pressure on the Reserve Bank of Australia (RBA), which recently kept rates at 4.60% due to stubborn inflation. Overnight Index Swaps now suggest a 40% chance of a rate cut by April 2026, up from just 15% yesterday. We think this change in interest rate expectations will put continued pressure on the Australian Dollar. In the coming weeks, we should consider buying put options on the AUD/USD to prepare for further declines while managing risk. The immediate drop to 0.6662 reflects the market’s negative response, and we expect implied volatility to rise as uncertainty about the RBA’s next steps increases. This situation makes strategies like long puts or put spreads particularly appealing. Looking back, we saw a similar situation in late 2019 when a weakening job market led to RBA rate cuts and a declining Aussie dollar. We should now be cautious about holding long AUD positions, especially against currencies like the Canadian Dollar, where the AUD has already weakened. The next significant event will be the fourth-quarter inflation data released in late January 2026, which will be crucial for the RBA’s meeting in February.

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