Aussie is likely to continue to trade volatile – Commerzbank
|Following the Reserve Bank of Australia's (RBA) interest rate decision two weeks ago, the Australian Dollar has depreciated significantly. Economists at Commerzbank analyze Aussie’s outlook.
A renewed pause in interest rates is unlikely to surprise the FX market
If the monthly inflation numbers, which will be published at the end of August, confirm the general trend that the previous interest rate hikes are having an effect, then the RBA will probably see itself confirmed in its approach and stay on hold again in September, especially in view of the weaker growth outlook in China.
However, a renewed pause in interest rates is unlikely to surprise the FX market given current market expectations. Nevertheless, the RBA has already surprised the FX market twice this year with rate hikes. Given this backdrop, and also considering the lower trading liquidity in August, the Aussie is likely to continue to trade volatile.
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