The Australian employment data disappointed. Economists at Commerzbank note that the Aussie is unlikely to enjoy further gains for the time being.

Labour market report takes the wind out of AUD’s sails

“The weak December labour market report confirmed the end of AUD/USD’s advance on the 0.70 mark for now. Although nothing changed about the short-term rate hike expectations – the market is likely to wait for the publication of the Q4 inflation data next week to fine tune its short-term rate expectations.”

“Today’s labour market report makes it seem unlikely though that the Reserve Bank of Australia (RBA) will continue to hike interest rates for longer than currently expected after all.”

“The imminent end of the rate hike cycle seems a done deal as soon the monetary tightening has too much of an effect on the real economy. That is likely to take the wind out of the Aussie’s sails for now.”