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Sep 14 - 12:55 PM

ING: Riding the Aussie Wave: ING Forecasts Bullish Turn for AUD but Warns of a Cap

By eFXdata  —  Sep 14 - 10:45 AM

Is the Australian Dollar (AUD) ready for a sunnier outlook? After a stronger-than-expected August jobs report, ING weighs in on whether the AUD is poised for more gains. Despite a substantial hiring spike and the potential for wage growth, ING still sees limitations to the AUD's upside—here's why.

Key Takeaways:

  1. Jobs Jolt: Australia's employment surged by 64.9k, beating expectations and bouncing back from July's negative numbers. However, the uptick was mostly in part-time roles.

  2. Steady Unemployment: The unemployment rate remained unchanged at 3.7%, offering a stable backdrop.

  3. New Governor in Town: Michele Bullock, the new RBA Governor, might aim to make a bold statement about controlling inflation with a final rate hike this year, taking it to 4.35%.

  4. Market Misalignment: Markets are currently pricing in only a minimal tightening, leaving ample room for a hawkish repricing of the AUD.

  5. USD Dominance: The AUD/USD pair may find it tough to break above the 0.6500 mark as the U.S. dollar remains strong.

What This Means:

For Forex Traders:
  • High Volatility Alert: With underpricing in the market and new labor data, AUD offers an exciting but complex landscape.

  • Cap Watch: Despite bullish trends, keep an eye on the 0.6500 resistance level for AUD/USD.

For Investors:
  • Rate Hike Radar: Will the RBA pull the rate hike trigger one last time? That could have broad implications for Australian equities and bonds.
For Policy Watchers:
  • Inflation vs. Growth: The new RBA Governor’s stance on inflation could signal the Reserve Bank’s policy direction for the near term.

Whether you're trading forex, investing in Australian assets, or just interested in macroeconomic trends, this report offers vital clues on what might be next for the AUD. Keep watching this space!

ING Research/Market Commentary


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