-Glens Stevens, RBA governor
Earlier this year Australian policymakers claimed that an exchange rate of the Aussie against the U.S. counterpart around 0.92 is representing a threat to the domestic economy, dampening exporters' profits. After a shift in the RBA's mood the Aussie soared back into this dangerous territory, while Glenn Stevens comments provided an additional boost to the currency.
During a speech in Hong Kong RBA's Governor highlighted positive developments in the economy, saying the transition phase from mining-led demand is moving to its end. Stevens cited domestic consumption as the key driver of the economy. Analysts believe the central bank will keep the interest rate unchanged during the year in order to avoid a growth gap that is emerging amid decreasing number of mining projects. This suggestion was supported by Stevens, who pledged to keep borrowing costs at a record-low 2.5% for a period of time to encourage household spending and residential construction. On the back of his comments the Aussie gained additional 0.33% versus the greenback and 0.41% against the single currency. Regarding the housing market Stevens warned that both borrowers and lenders should not be complacent about the risks of investing in the nation's property market. While Australian financial stability remains sound, heating housing market will not be on the RBA's radar.
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