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Commerzbank flags fading RBA hike expectations for Australian dollar

FXStreet reports AUD/USD held near 0.6950 in the Asian session after softer August underlying CPI data undercut expectations for additional Reserve Bank of Australia hikes.

Reported · Written up by our desk · Major Pairs

Commerzbank strategist Volkmar Baur said market expectations for 1.5 more Reserve Bank of Australia rate hikes look excessive after softer August CPI data, according to FXStreet.

He added that while inflation is still above the RBA target, the central bank’s prior tightening may take time to filter through, and he pointed to weakness in the real estate sector as another drag.

Baur concluded the RBA is likely to wait rather than deliver further hikes, which implies limited upside support for the Australian dollar.

FXStreet reported AUD/USD was near two month lows around 0.6950 during the Asian session, with below expectation Australian underlying CPI data weighing on expectations for further RBA tightening.

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