AUD Retreats After Q3 Wage Data Release as Markets Reassess RBA Rate Outlook

Australian Dollar Weakens Despite Softer RBA Signaling

The Australian Dollar has given back recent gains against the US Dollar on Wednesday, sliding more than 0.25% from the previous session’s strength. While the RBA signaled a more balanced and cautious approach at its latest monetary policy meeting, the AUD/USD pair remains under pressure, currently trading around 0.6490.

Australia’s Q3 Wage Price Index came in exactly as anticipated, with quarterly growth of 0.8% matching both forecasts and the prior quarter’s reading. The year-on-year wage growth of 3.4% also aligned perfectly with consensus expectations, suggesting relatively stable labor cost inflation. However, the alignment with expectations provided limited upside catalysts for the Australian Dollar.

The Reserve Bank of Australia’s November meeting minutes revealed board members leaning toward a holding pattern on monetary policy. RBA officials indicated they could maintain the cash rate at its current level for an extended period if economic data continues to surprise on the upside. Market pricing reflects this caution: the December 2025 interbank cash rate futures are currently priced at 96.41, implying only an 8% probability of a rate cut to 3.35% by the RBA’s next decision.

For traders monitoring Australian Dollar movements—whether through currency pairs or cross-rate positions like ethereum price in aud—the key narrative remains the RBA’s pause stance versus the Fed’s diverging path.

Greenback Maintains Resilience as Fed Rate Cut Bets Cool

The US Dollar Index (DXY) continues to hover around 99.60, drawing support from sharply declining expectations for Federal Reserve rate reductions in December.

Market probabilities have shifted significantly over the past week. The CME FedWatch Tool now suggests only a 49% chance of a 25 basis point cut at the December Fed meeting, down substantially from 67% just seven days prior. This recalibration reflects evolving Fed communication and recent US economic data.

Federal Reserve officials have taken a notably hawkish tone in recent commentary. Vice Chair Philip Jefferson stressed on Monday that labor market risks now outweigh inflation concerns, yet emphasized the Fed should proceed “slowly” with further cuts. Kansas City Fed President Jeffrey Schmid added that monetary policy should “lean against demand growth,” characterizing current policy as “modestly restrictive”—a stance he deems appropriate for current conditions.

On the employment front, initial jobless claims reached 232,000 in the week ending October 18, while continuing claims ticked up slightly to 1.957 million. ADP payroll data revealed employers cut an average of 2,500 jobs weekly during the four weeks ending November 1. National Economic Council Director Kevin Hassett cautioned that some October labor statistics may never be fully captured due to government shutdown disruptions affecting data collection.

Private sector employment reports increasingly point to labor market cooling and consumer confidence wavering, though inflation remains a persistent concern for policymakers.

Mixed Australian Employment Picture Complicates RBA Calculus

On the domestic front, Australia’s labor market has sent contradictory signals. The October Unemployment Rate declined to 4.3%, better than the 4.4% forecast and down from 4.5% in September. However, Employment Change surprised to the upside at 42.2K, crushing the 20K expectation though the prior month’s figure was revised downward to 12.8K.

RBA Deputy Governor Andrew Hauser acknowledged last week that “monetary policy likely remains restrictive, though the committee continues to debate this.” He added that should policy no longer be mildly restrictive, this would carry significant implications for the central bank’s future decisions. This suggests internal debate within the RBA about whether its current stance is appropriately calibrated.

These mixed signals explain why the Australian Dollar has struggled to build sustained momentum despite the employment surprise. Markets are now in a holding pattern, awaiting clearer directional cues from incoming data.

Technical Picture: AUD/USD Consolidating Within Range

On the daily chart, AUD/USD is trading sideways within a defined rectangular consolidation pattern, a setup typical during periods of policy indecision. The pair’s current positioning below the nine-day Exponential Moving Average (EMA) indicates that bearish pressure remains in place.

The immediate downside support sits at the rectangle’s lower boundary near 0.6470, with secondary support at the five-month low of 0.6414 (established on August 21).

To the upside, the first technical barrier lies at the psychologically important 0.6500 level, closely followed by the nine-day EMA at 0.6514. Should buyers clear this confluence zone decisively, the pair could advance toward the rectangle’s upper boundary near 0.6630.

Current positioning suggests the pair requires external catalysts—either from Australian employment or inflation data, or fresh Fed communications—to break out of its current range-bound trading.

Currency Strength Rankings

The Australian Dollar ranked as the day’s weakest performer against major currencies, particularly struggling against the Japanese Yen. The AUD declined 0.20% against JPY, while showing smaller losses against other major pairs. Meanwhile, the US Dollar exhibited modest strength, with the USD/AUD pair up 0.29% as the Greenback benefited from Fed rate cut disappointment.

For those tracking Australian Dollar performance across multiple asset classes—from traditional FX pairs to cryptocurrency valuations like ethereum price in aud—the broader narrative remains one of consolidation until clearer policy divergence emerges between the RBA’s cautious stance and the Fed’s more resilient posture.

Key Economic Releases Ahead

Australia’s Wage Price Index remains central to RBA decision-making, with the next quarterly release expected in February 2026. Until then, employment figures, inflation data, and Fed policy communications will likely drive AUD/USD directional moves, with the pair potentially trapped in its current range until a catalyst emerges.