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23 Mar 2016
RBA did not talk down the AUD - TDS
Research Team at TDS, notes that yesterday’s RBA Stevens’ ASIC opening remarks were familiar, i.e. economy adjusting well but scope to ease.
Key Quotes
“Upbeat (as is usual for him when solo) is because it's "zeitgeist to look for downside". His conclusion: "The local economy has been improving and the financial system gaining in resilience … and a reasonable track record of adapting to shocks, we have some grounds for confidence in our capacity to negotiate whatever lies ahead." i.e. not dovish and gave AUD a bid. Always remains distant from "China" such as "Uncertainty about the future direction of the renminbi has been a factor in exchange markets, but the same must be said about the yen and the euro."
Given the rally in the AUD in the last month, there were expectations that the RBA Gov may jawbone the AUD. While the RBA did not talk down the AUD, an AFR report revealed that the US branch of the IMF complained 6 months ago that the RBA statements talking down the AUD “...could be perceived to be inconsistent with their international commitment to a market determined exchange rate. We think this is a case of the ‘pot calling the kettle black’.”
Key Quotes
“Upbeat (as is usual for him when solo) is because it's "zeitgeist to look for downside". His conclusion: "The local economy has been improving and the financial system gaining in resilience … and a reasonable track record of adapting to shocks, we have some grounds for confidence in our capacity to negotiate whatever lies ahead." i.e. not dovish and gave AUD a bid. Always remains distant from "China" such as "Uncertainty about the future direction of the renminbi has been a factor in exchange markets, but the same must be said about the yen and the euro."
Given the rally in the AUD in the last month, there were expectations that the RBA Gov may jawbone the AUD. While the RBA did not talk down the AUD, an AFR report revealed that the US branch of the IMF complained 6 months ago that the RBA statements talking down the AUD “...could be perceived to be inconsistent with their international commitment to a market determined exchange rate. We think this is a case of the ‘pot calling the kettle black’.”