AUD/USD: Aussie to be well supported in view of hawkish RBA – Commerzbank

The Australian labour market data for May published yesterday was much better than expected. Economists at Commerzbank analyze AUD outlook after the report.

Surprise rise in employment in Australia fuels rate hike expectations
Employment rose by an impressive 75.9K MoM. The data is likely to add to the Australian central bank’s (RBA) concerns that inflation remains stubbornly at high levels.

The market expects the RBA to take countermeasures and to further hike the key rate compared with the current 4.1%.

Against this background, it would seem that the Aussie, which yesterday also benefitted from a weakening USD, will not continue to rise endlessly. Seeing that the Fed seems willing to implement further rate hikes despite the recent pause we consider AUD to be well supported though in view of an also hawkish RBA.