An article in the Australian Financial Review headlined: RBA wants dollar to fall further

I don’t see anything much new in it, but it is ungated and gives good background on the current economy and some pertinent quotes from investment bank economists:

  • RBS Singapore-based currency strategist Greg Gibbs said the Australian dollar, longer-term, will “feel about right” in the low US80¢ range.
  • He said that for now international markets were not overly bearish on the Australian dollar but its break from range had generated attention.
  • “Last year you had a more bearish frame of mind for the Australian dollar, this year it kind of snuck up on the market really . . . When the currency starts to break out of established ranges as it has done in the past month that starts to get people’s attention.”
  • Mr Gibbs highlighted how the Australian dollar was being dragged down by the US dollar rally, the iron ore price falls, China’s slowdown and the RBA’s interest in macro-prudential controls .
  • The rhetoric coming out of the Reserve Bank of New Zealand, which jawboned the kiwi last week and confirmed foreign exchange intervention on Monday, had an influence too. “Even the rhetoric from the RBA is not dissimilar to the Reserve Bank of New Zealand,” Mr Gibbs said.

More at the link