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Australian dollar steadies near 109.80 yen as yen strengthens
Commerzbank pointed to renewed weakness in building permits, down 6.1% month over month in August, and continued city price declines as reasons the RBA could “wait and see.”
The Australian dollar rebounded against the Japanese yen and held around 109.80 during the European session on Monday, according to FXStreet. The bounce came even as markets questioned whether the Reserve Bank of Australia will raise interest rates again this year after already hiking four times.
FXStreet said Commerzbank argued rate increases typically take time to feed through to the real economy, citing signs of stress in Australia’s real estate sector. The bank highlighted that building permits fell again in August by 6.1% versus the prior month, and that prices in the largest cities continue to decline.
On that basis, Commerzbank concluded the RBA would likely be better off waiting to see how conditions develop over the coming months rather than moving ahead with the additional scale of hikes reflected in market pricing.
Meanwhile, FXStreet noted the yen outperformed other major peers as Japan reiterated a commitment to fiscal discipline. The reporting says Japan will control the annual amount of debt issuance while scrutinising spending.