The bank warns a deteriorating Chinese economy could extend the $A’s sell-off, creating a fresh inflationary headache for the RBA.
The Commonwealth Bank has warned that the deterioration in the Chinese economy could see the Australian dollar falling below US60¢, a level not seen since the start of the pandemic in 2020.weak economic data out of China
Money markets now imply there is just a 5 per cent chance that the RBA will raise rates in September, down from 10 per cent before the data was released.While the early signs of softness in the labour market were welcome news for the central bank, it accelerated the Australian dollar’s sell-off. It also provides a new inflationary headache for the central bank given a weaker Aussie drives up the cost of imported goods.
Meanwhile, petrol prices are still hovering at the highest level in more than a year, with the average price for regular unleaded fuel in Sydney sitting at 213.6¢ per litre this week, according to the NRMA. “Although recently, we are at the low end of the range that we’ve been in on a trade-weighted basis for the last year or so, so it will be in the RBA’s thinking.”The Aussie dollar’s decline has coincided with a renewed concern that inflation could prove more persistent than markets had anticipated, increasing the risk of further rate rises by central banks.
“The US 10-year has started to creep up, so while the bond market is adjusting, the equity market has a lot further to go because we saw a massive rally in valuations based on expectations the Fed was close to being done, and the risks are they may not be.”
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Worker sues CBA-owned start-up, claims it made him work 60-hour weeksUnloan forced a former employee to work up to 60 hours per week, perform multiple roles, and then made him redundant after he complained, the worker alleges.
Read more »
How Matildas rose from ashes of ‘innuendo and mystery’ in Aussie sport’s ugliest divorceHow Matildas rose from ashes of ‘innuendo and mystery’ in Aussie sport’s ugliest split
Read more »
Matildas hero brutally snubbed in ‘hurtful’ callAussie supporters have been left angry and frustrated by a billion-dollar company’s decision.
Read more »
Aussie’s shock surge as PGA Tour hits $31m boiling point amid hidden legacy fightAussie’s shock surge as PGA Tour hits $31m boiling point amid hidden legacy fight
Read more »
Why the New Zealand housing market keeps Aussie bankers awake at nightThe NZ home loan market is a worrying case study of how savagely bank lending margins get whittled away when demand for credit is weak.
Read more »
Law student’s terrifying warning over everyday act Aussie parents do‘These parents have no idea about it.’
Read more »