The Australian dollar weakened modestly in August. Economists at MUFG Bank expect to see AUD weakness for now before recovery in 2023.

Jobs market in Australia will support growth going forward

“We would expect the solid fundamentals to lead to some rebound by year-end and into 2023.” 

“The jobs market in Australia will support growth going forward with the labour participation rate at the highest level in 112 years. Stronger wage growth is likely and that will ensure continued monetary tightening with risks to the upside relative to the RBA guidance.” 

“Economic growth is expected to slow due to tighter policy and slower global growth with the RBA estimating 3.25% growth in 2022 and 1.75% in 2023 and 2024.” 

“More favourable growth in China in 2023 should also help ensure higher AUD/USD levels next year even with growth more subdued.”