Australia’s dismal jobs data weighed on the Reserve Bank of Australia’s (RBA) rate hike expectations, smashing AUD/USD. However, economists at ING maintain a bullish bias.

Too early to make strong calls about the end of the RBA hiking cycle

“The Australian Dollar has come under pressure after a surprise contraction in employment in December, which endorses the recent cautious stance by the Reserve Bank of Australia. Still, we’d need to see inflation come off more convincingly before making strong calls about the end of the RBA hiking cycle.”

“We continue to favour AUD/USD on the back of positive external developments (China, risk sentiment).”