After the ECB and then the BOC complained about the exchange rate, the RBA followed suit. It seems that everybody except the BOE wants a lower currency.
For Australia’s central bank, it is certainly not the first time. While the recent meeting minutes do not shed any surprising new light, they serve to keep the pressure on the Australian dollar.
The minutes from the September meeting say that the stronger exchange rate weighs on domestic growth an inflation. Any additional increase in the value of the currency could result in a slower pick-up in inflation and growth. This is not new and they also acknowledge that AUD/USD is driven higher by the weakness of the greenback as well. Nevertheless, this has its effect on the pair.
This is not new and they also acknowledge that AUD/USD is driven higher by the weakness of the greenback as well. Nevertheless, this has its effect on the pair.
AUD/USD fell to as low as 0.7955 and despite bouncing from the lows, it has trouble in recapturing the 0.80 level.
What else did they have to say? The RBA is pleased with the job growth but wage growth lags behind. This is a global phenomenon. They note that Sydney’s steaming hot housing market has finally eased, but they keep their eyes open on Melbourne.
According to the latest official statistics, the House Price Index rose by 1.2%, better than 1.2% predicted.
The wider economy is doing well and is less dependent on China. Australia’s No. 1 trading partner is enjoying better-than-expected growth, albeit fueled by high debt.