Australia will release the December monthly employment report on Thursday at 0:30 GMT, with market participants anticipating a modest recovery in labor market conditions. The Australian Bureau of Statistics (ABS) is expected to announce that the country added 30,000 new jobs in the month, while the Unemployment Rate is forecast at 4.4%, up from the 4.3% posted in November. The Participation Rate is seen at 66.8%, pretty much unchanged from the previous 66.7%.
The ABS reports both full-time and part-time positions through the monthly Employment Change. Generally speaking, full-time jobs entail working 38 hours or more per week, usually include additional benefits, and typically provide a consistent income. On the other hand, part-time employment generally means higher hourly rates but lacks consistency and benefits. That’s why the economy prefers full-time jobs. In November, Australia gained 35,200 part-time positions but lost a whopping 56,500 full-time positions.
Australian unemployment rate expected to tick higher in December
Financial markets, however, are not about macroeconomic data, but about United States (US) President Donald Trump’s decision. Risk aversion dominates financial boards amid escalating tensions between Trump and Europe over Greenland. The US President wants to take over the Danish territory, even offering to buy it. Trump claims the US needs it for better defense of its territory, but it is worth noting that Greenland is rich in rare-earth elements. Given Denmark’s refusal to cede its territory, Trump threatened several Nordic countries with fresh tariffs, adding that they would increase them in time until a deal to buy Greenland is achieved.
He also threatened France with levies, though for a different reason: Trump proposed creating a Board of Peace, a US-led organization meant to “promote stability, restore dependable and lawful governance, and secure enduring peace in areas affected or threatened by conflict.” Countries that wish to join the organization must pay US$1 billion. French leader Emmanuel Macron has doubts about joining it, claiming that it is the North Atlantic Treaty Organization’s (NATO) role to work on peace. As a result, US President Trump threatened to impose tariffs of up to 200% on French wines and champagne.
As a result, Gold price skyrocketed to record levels amid a run to safety, which in turn, underpins demand for the Australian Dollar (AUD).
Meanwhile, the Reserve Bank of Australia (RBA) is scheduled to meet and announce its first monetary policy decision of the year on February 3. The central bank has left the Official Cash Rate (OCR) unchanged at 3.6% since reaching that level in August 2025, with the December statement indicating policymakers are concerned about both employment and inflation.
“Turning to considerations for the monetary policy decision, members highlighted three judgements that were central to their decision at this meeting: first, the extent to which aggregate demand exceeds potential supply, and the implications of this for the persistence of the recent pick-up in inflation; second, the outlook for growth in labour demand and economic activity; and, third, whether financial conditions were still restrictive.”
However, the latest Australian employment figures have been generally disappointing, hinting at a loosening labor market. In that sense, the RBA may find some relief, but inflation remains a concern: the country’s annual inflation slowed to 3.4% in November 2025 from 3.8% in October, still above the RBA’s 2–3% target.
Considering this broader picture, the Australian monthly employment report is likely to provide additional legs to the Australian Dollar (AUD) against its American rival, particularly if the report comes in line with or better than expectations.
When will the Australian employment report be released and how could it affect AUD/USD?
The ABS December employment report will be released early on Thursday. As previously noted, the Australian economy is expected to have added 30,000 new jobs in the month, while the Unemployment Rate is forecast at 4.4%. Market participants will also be attentive to the breakdown of full-time and part-time positions.
Valeria Bednarik, Chief Analyst at FXStreet, notes: “The AUD/USD pair trades near its recent peak at levels that were last seen in October 2024, closing up to the 0.6800 mark ahead of the release of Australian employment data, boosted by persistent risk aversion. The pair may seem overbought in the near term, but there is no reason for the USD to strengthen, and hence, slides are likely to keep attracting buyers, as long as the dismal mood persists.”
Bednarik adds: “Relevant resistance comes at 0.6830, en route to the 0.6870 price zone. Gains beyond the latter are unlikely solely because of the employment report, although the pair could rally further if risk sentiment deteriorates. An AUD slide on a dismal employment report should lead to a slide towards the 0.6700 level, where buyers will likely reappear to add longs.”
Economic Indicator
Unemployment Rate s.a.
The Unemployment Rate, released by the Australian Bureau of Statistics, is the number of unemployed workers divided by the total civilian labor force, expressed as a percentage. If the rate increases, it indicates a lack of expansion within the Australian labor market and a weakness within the Australian economy. A decrease in the figure is seen as bullish for the Australian Dollar (AUD), while an increase is seen as bearish.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.