A piece from Fast FT nails it:
- The Reserve Bank of Australia monetary policy is not on hold.
- The RBA is being very active in trying to weaken the currency by media outreach rather than monetary intervention
In a series of rare interviews over the past week, RBA Governor Glenn Stevens has indicated he’d like to see the Aussie dollar trading at around $0.85 – about 4.5 cents lower than the three-month low it hit this morning.
Also, this from the ANZ; they see further weakness in the Aussie based on “the intensification of negative AUD rhetoric” from Mr Stevens…. but other factors are also at work:
Ongoing concerns over the medium-to-longer-run outlook for Chinese growth, expectations of weakness in key Australian commodity prices and a further deterioration in the terms of trade are additional factors weighing on the currency.
I find myself asking if Stevens get paid a million a year, how much of that is just for his mouth?