The AUD\/USD extends its correction, reaching around 0.6690 due to a weaker Australian Dollar. The trade surplus has narrowed to 2,936 million AUD in November, following a decline in exports.<\/p>\n
In contrast, the AUD\/USD retraced from the prior day\u2019s high of 0.6766. The soft Consumer Price Index (CPI) and weaker trade data exert pressure on the Australian Dollar.<\/p>\n
Inflation in Australia grew 3.4%, lesser than the estimated 3.7%, and unchanged on a monthly basis. The Reserve Bank of Australia signals no imminent interest rate cuts, with rate hikes still possible.<\/p>\n
Exports fell in November by 2.9%, while the previous month saw a rise of 2.8%. Simultaneously, the US Dollar holds firm due to strong ISM Services PMI data in December.<\/p>\n
The US Dollar Index climbs to approximately 98.86, its four-week high. The ISM reported Services PMI increased to 54.4 from 52.6 in November.<\/p>\n
Upcoming US Nonfarm Payrolls data will be crucial. It is set for release on Friday and closely monitored.<\/p>\n
We see the AUD\/USD pair under pressure, which feels similar to the situation a year ago in early 2025. Back then, the pair corrected sharply from its highs after disappointing Australian economic data was released for late 2024. That data showed a surprise drop in the trade surplus and softer-than-expected inflation figures.<\/p>\n
At that time in January 2025, the Reserve Bank of Australia was still talking tough, keeping the risk of an interest rate hike on the table even with cooling inflation. We remember Deputy Governor Hauser stating that rate cuts were “unlikely anytime soon” because inflation was still too high for their comfort. This hawkish stance provided some temporary support for the Aussie dollar.<\/p>\n
Meanwhile, the US Dollar was strengthening significantly a year ago due to very strong economic reports. The ISM Services PMI for December 2024, for instance, came in much higher than anticipated, pushing the US Dollar Index to a four-week high. This created a powerful divergence that favored a lower AUD\/USD.<\/p>\n
Now in early 2026, we see this divergence widening again, creating a compelling trading environment. The most recent Australian CPI data for November 2025 has finally dipped below the RBA\u2019s target range, coming in at 2.8%, while the trade surplus has shrunk to just 1,950 million amid falling iron ore prices. This contrasts sharply with the RBA’s firm stance just one year prior.<\/p>\n
Conversely, the latest US Nonfarm Payrolls report for December 2025 just showed a robust gain of 195,000 jobs, beating market expectations. This persistent strength in the US labor market suggests the Federal Reserve has little reason to accelerate any planned rate cuts. The clear difference in economic momentum between the two countries points to continued weakness for the Aussie.<\/p>\n
Given this setup, derivative traders should consider positioning for further downside in AUD\/USD over the coming weeks. Buying put options on the AUD\/USD provides a straightforward way to profit from a continued slide while defining risk. We could also look at implementing bearish put spreads to lower the upfront cost of the trade.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" AUD\/USD weakens to 0.6690 as Australian trade data disappoints and U.S. Dollar strengthens on PMI gains.<\/p>\n","protected":false},"author":62,"featured_media":16963,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-38605","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38605","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=38605"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38605\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16963"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=38605"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=38605"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=38605"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}