Australian Dollar Holds Near Three-Month High on Data

The Australian dollar stabilized around $0.667 against the US dollar on Thursday, reaching its highest level in three months, as investors evaluate the latest labor market data for signals regarding the Reserve Bank of Australia's direction.

The data showed that the Australian economy unexpectedly lost 21,300 jobs in November, marking the largest decline in nine months, all in full-time positions. Additionally, fewer people entered the labor market, keeping the unemployment rate steady at 4.3%. This weaker-than-expected data indicates a gradual slowdown in the labor market, prompting traders to push back their rate hike expectations to the second half of 2026 instead of May.

Despite this, the central bank still sees the labor market as relatively tight, citing an increase in job vacancies, labor shortages among businesses, rising labor costs, and indicators showing that the economy is operating close to full employment levels.

On another note, the Australian dollar received support from the decline of the US dollar following the Federal Reserve's 25 basis point interest rate cut, while comments from its Chairman Jerome Powell were less hawkish than the markets had anticipated.