**AUD Market Update: Trends, Outlook, and Influences in November 2025**
*Adapted and expanded from Westpac IQ, original author Ivan Colhoun*
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## Executive Summary
The Australian Dollar (AUD) experienced pronounced volatility and directional movement entering November 2025. Recent economic data, central bank signals, and global risk sentiment have all contributed to shaping the AUD’s trajectory. Investors and businesses need a clear understanding of the drivers influencing the currency to position themselves effectively in a changing macroeconomic environment. This article synthesizes insights from Ivan Colhoun’s recent Westpac IQ update, supplemented with additional analysis and context from leading financial sources.
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## Recent Performance of the AUD
– **Opening Movements:**
At the start of November 2025, the AUD has been trading in a range between US$0.6500 and US$0.6650, reflecting ongoing uncertainty in global markets, and the ongoing digest of both international and domestic economic developments.
– **Short-Term Volatility:**
Heightened volatility was observed after the release of key economic indicators from both Australia and major trade partners such as China and the United States. Risk sentiment has alternated between risk-on and risk-off, swinging currency positions among traders.
– **Influence of External Markets:**
Global equity markets and commodities, particularly iron ore and coal prices, continue to play a crucial role in determining the direction of the AUD.
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## Key Macro Drivers Affecting the Australian Dollar
### 1. Domestic Economic Data
– **Inflation Dynamics:**
Australia’s quarterly CPI surprised on the upside, with underlying inflation persisting higher than the Reserve Bank of Australia’s (RBA) 2 to 3 percent target band. Contributing factors include elevated rent increases, insurance costs, and renewed energy price pressures.
Recent quarterly CPI read:
– Headline CPI: 3.4 percent year-on-year
– Underlying (Trimmed Mean) CPI: 3.1 percent year-on-year
– **Labour Market:**
Australia’s unemployment figures have remained below expectations. The official jobless rate hovers around 3.8 percent, while participation rates stay high. Leading indicators suggest some softening may occur later in 2025, but demand for workers remains robust, especially in the healthcare, construction, and mining sectors.
– **Retail Sales and Consumption:**
Retail sales figures fell short of projections in October but remain moderately healthy overall. Consumer sentiment surveys indicate caution, particularly regarding discretionary spending as cost-of-living pressures mount.
### 2. Monetary Policy Developments
– **RBA Stance:**
At its most recent meeting, the RBA held the official cash rate steady at 4.35 percent, but its commentary remained vigilant about the upside risks to inflation. The Board noted the persistence of sticky services inflation and pledged to remain “data dependent.”
– **Market Expectations:**
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