26 Nov 2013
Flash: AUD strengthened modestly overnight on RBA commentary - BTMU
FXstreet.com (Barcelona) - Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that the foreign exchange market has remained relatively stable overnight.
Key Quotes
“The Australian dollar has strengthened modestly supported by comments from RBA Deputy Governor Lowe who stated overnight that “the threshold for intervention though is fairly high”.”
“However, he didn’t “rule intervention in or out” which has been a long-standing practice for the RBA. Noting that “in the past, we have been prepared to intervene in the currency market when it’s clear the currency was misaligned or the market wasn’t working well.””
“The speech also highlighted the main economic challenge the Australian economy now faces as it “can no longer depend on rising terms of trade and favourable demographics” to boost living standards which will require an offsetting pick up in productivity.”
“It echoes recent comments from the Australian Treasury’s top economic forecaster David Gruen, who stated that Australia should brace for the weakest income growth in half a century in the coming ten years.”
Key Quotes
“The Australian dollar has strengthened modestly supported by comments from RBA Deputy Governor Lowe who stated overnight that “the threshold for intervention though is fairly high”.”
“However, he didn’t “rule intervention in or out” which has been a long-standing practice for the RBA. Noting that “in the past, we have been prepared to intervene in the currency market when it’s clear the currency was misaligned or the market wasn’t working well.””
“The speech also highlighted the main economic challenge the Australian economy now faces as it “can no longer depend on rising terms of trade and favourable demographics” to boost living standards which will require an offsetting pick up in productivity.”
“It echoes recent comments from the Australian Treasury’s top economic forecaster David Gruen, who stated that Australia should brace for the weakest income growth in half a century in the coming ten years.”