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Thursday’s jobs data gave the Aussie a brief boost, but that boost quickly faded as the dollar strengthened. Economists at Commerzbank analyze the outlook for the Australian dollar.
Relationship Between Australian Labor Market Data And Inflation Data
So far, the labor market does not appear to be feeling the impact of the RBA’s aggressive rate hikes as expected.
Second-quarter inflation data next Wednesday will be the last data point before the next monetary policy meeting in early August. Reported second-quarter inflation is likely to move lower. The interesting question should be: how much will it weaken? After all, this is a key data point for the RBA’s upcoming policy decision.
So far, money markets appear to be undecided on whether another rate hike will follow. A relatively strong labor market supports another rate hike, which was why the Aussie initially reacted strongly. More important, however, is inflation. If inflation falls less than expected, the RBA will likely hike rates again.
