Australian dollar lifts on RBA statement

Financial and commodity markets analytics

The Australian dollar has remained resilient in today’s trading after an upbeat speech by Reserve Bank of Australia Governor Glenn Stevens earlier today.

At 5.17pm (GMT) the Aussie dollar was trading at US76.21c up 0.57 percent from yesterday’s trading.

Most analysts expected MR Stevens to “jawbone’ the Australian dollar in a bid to bring the currency lower after it’s stellar rise since the beginning of the year.

In a surprise, the Governor sounded upbeat about the economy and only mentioned the currency by noting that it "might be getting a bit ahead of itself."

His main point was the Australian economy is adjusting after the mining boom and all indicators suggest that the picture is looking rosy.

"The fact that Australia has a sound and credible macroeconomic policy framework, which could, if needed, respond as appropriate to significant negative events is also a good starting point," he noted at ASIC's annual forum in Sydney.

"Even with interest rates at already low levels, and public debt higher than it was, there would, in the event of a serious economic downturn, be more room to ease both monetary and fiscal policy than in many, indeed most, other countries." He added.

Mr Stevens also fended off allegations that the RBA was trying to choose the direction of the Australian dollar with negative comments,

"We run normal monetary policy; the exchange rate floats; we have not done a dollar of intervention in this whole episode," Mr Stevens said.

"Occasionally, we have an opinion about a market price – which is not that unknown in central banking circles." he added



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