Aussie dollar higher on RBA speech

Financial and commodity markets analytics

The Australian dollar is trading higher today after a comments by Reserve Bank Governor of Australia Glenn Stevens lent some support to the currency.

Towards the close of trade on Tuesday, the Aussie dollar was trading at US72,51c up from US71,90c from the previous day’s trade.

In a speech to a group of business economists, governor Stevens use the words “Chill out” when pressed on the topic of an interest rate cut this year, which had many analysts predicting that a rate reduction was all but off the table until next year.

Leaving the door open for further rate cuts he added that further indicators would be the Key to a rate cut and only time would tell the story,

"I'm more than content to lower it if that actually helps, but is that the best thing to do at any particular time?" he told the gathering of economists,

"We've got Christmas. We should just chill out, come back and see what the data says." He added.

Also helping the Australian dollars cause were numbers out of the US, which showed that personal consumption for the 4th quarter was weaker than expected, although it was slightly stronger than the previous quarter.

The Aussie dollar has been resilient in the face of lower Iron ore prices but some are predicting that the party is about to end after Australia’s biggest commodity slumped to a new 10-year low of US$43.40 a tonne which will inevitably drive the local currency down


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