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Hardy: RBA talks down AUD strength - again
The Reserve Bank of Australia (RBA) has decided to keep the cash rate at a record low 2.5 percent. Governor Glenn Stevens said economic growth was "still a little bit below trend", but he expects the economy to pick up next year.
Commenting on this, Saxo Bank's John Hardy says the central bank did its best to talk down the AUD strength "once again". Stevens said the currency remained “uncomfortably high” and that a lower level will “likely be needed” if Australia wants the right kind of growth in the future.
John also explains there was a fairly mild reaction in currency markets as AUDUSD sold off back to the lower range after pushing slightly above 0.9500 before the meeting.
He thinks it's clear that the RBA will lean hard against any appreciation of the currency from here.
John adds that the latest Australian jobs data - out on Thursday - could trigger a shift for the aussie dollar. He says: "If we see a really weak unemployment report, the Aussie bear market could be back on in the near-term."
But he adds: "A strong number could see another back-up in some of the Aussie crosses – but I'm still looking for weakness in the near term for the Aussie."
02:09 minutes
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