SYDNEY, Jan 18 (Reuters) - Australian employment fell sharply in December after two months of surprisingly strong growth, while the jobless rate stayed at a 1-1/2 year high, a result that added to the case that interest rates have peaked.

Figures from the Australian Bureau of Statistics on Thursday showed net employment dived 65,100 in December from November, when it surged a revised 72,600. Market forecasts had been for an increase of around 17,600.

The Australian dollar dipped to $0.6538 after the data was released, then rebounded to $0.6550, while three-year bond futures held losses at 96.18, down 7 ticks on the day as traders pared back optimism on global easing.

The jobless rate stayed at 3.9%, the highest reading since May 2022. The participation rate dropped sharply to 66.8%, from a record high of 67.3%.

The ABS itself noted that a change in the hiring pattern late last year led to the unexpectedly strong employment gains in October and November and a large fall in December in seasonally adjusted terms.

"The strength in employment in October and November and the fall in December reflected changes in the timing of employment growth in the last few months of 2023, compared with earlier years," said David Taylor, ABS head of labour statistics.

For the quarter, employment grew 52,000 from the September quarter, about 17,000 a month, which was not enough to absorb the increased supply in the workforce as migration surged. Thus, the jobless rate rose to 3.9% from 3.6% in September.

The report also showed a clear slowing in the trend figures, with a rising underemployment rate and a slowdown in employment growth and hours worked.

The Reserve Bank of Australia is likely to take comfort in the strong performance of the job market, with employment helped by robust population growth, which is boosting labour supply and restraining wage inflation.

The RBA has jacked up interest rates by a whopping 425 basis points to a 12-year high of 4.35% since May 2022. It has also left the door open to further hikes.

Traders still wagered that interest rates have peaked but the risk of a prolonged return for inflation to target has led them to wager on a rate cut only in November.

They now only see 32 bps of easing this year.

(Reporting by Stella Qiu; Editing by Sonali Paul)