AUD/USD to struggle to gain ground as RBA might slow the speed of its rate hikes – Commerzbank

AUD/USD is falling sharply after barricades around 0.6900. Economists at Commerzbank believe that the aussie is unlikely to enjoy gains ahead.

Reserve Bank of Australia might slow the speed of its rate hikes

“In early August the RBA had hiked its key rate by 50bp to now 1.85%. It signalled further rate hikes but will take its decisions one by one. In the meantime, the unemployment rate has fallen further, to now 3.4% in July. Moreover, wage costs rose by 2.6% in Q2. On the other hand, growth prospects for China and the global economy have deteriorated.”

“I assume that the RBA will remain on its restrictive course but might slow the speed of its rate hikes. That might make it more difficult for AUD to gain ground against the US dollar.”