AUD Slumps as Inflation Concerns Bolster USD Ahead of US Jobs Report
Ahead of Friday's release of US September employment data, traders are closely watching for signals on the future direction of Federal Reserve monetary policy. Economists project a slowdown in job growth, with Nonfarm Payrolls expected to show an addition of only 90,000 jobs, down from the previous month's 162,000.
Meanwhile, Matt Comyn, CEO of Commonwealth Bank (CBA), noted that while CBA believes the Reserve Bank of Australia has finished hiking interest rates for now, the board's November meeting remains 'live' with another rise still a possibility. Speaking with the ABC's Alan Kohler, he emphasized that the RBA's next move will heavily depend on the quarterly inflation data scheduled for release at the end of the month.
Commerzbank's Volkmar Baur acknowledges that 'there's no question that inflation is still too high, and it will take a while before it returns to the middle of the target range,' but argues that the Reserve Bank of Australia is unlikely to respond with further rapid tightening. Pointing to the lagged impact of previous rate hikes and emerging weakness in the real estate sector, he suggests the RBA will prefer to wait and assess the effects of policy already in place.