Various bits and pieces from around the place:
Commonwealth Bank of Australia head of international economics, Richard Grace:
- “I think he has a personal view that it should be lower”
- “He would consider it should be several cents lower, but he has acknowledged these are unusual times”
National Australia Bank senior currency strategist Emma Lawson:
- “They clearly want it lower and what does he say – not just by a few cents. A lower Australian dollar is what he wants so I don’t think they should be surprised by the currency move on the back of the speech,” she said. “He does warn about any significant fall so I think that by including that kind of phraseology no matter what he says about not wanting to engage in jawboning each month… it is quite clear that they would like it lower.”
Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney:
- “Stevens’s language is about as strong as could be expected without introducing an explicit policy easing bias,”
- “It makes the case for Aussie underperformance against a range of currencies until further notice.”
UBS economists Scott Haslem and George Tharenou say.
- Says implies next move is likely to be removing the “period of stability” comment … to be replaced with “remained appropriate”, “long before any thought were to be given to an increase in rates”
- Says believes the full impact of low rates is yet to be felt
- Says comment that they still have “ammunition” on rates – threefore seems fair to say that given the right conditions eg, if a persistently high AUD and a clear weakening in the data flow … the RBA would be more likely to be easing rates than raising them over coming months
- UBS says though that thre is no change in their rate outlook – the RBA will remain on hold this year and start hiking in Q1 … but the risk is that this start may be too early
