"With reasonable care, with attention to its strengths, with a lively interest in the opportunities opened by the growth of Asia, it will continue to do well"
-John Edwards, RBA board member
According to economist John Edwards, Australia can overcome a slump in mining investment as low interest rates and infrastructure spending boost other industries, while Japan could become once again the nation's biggest trading partner. Edwards believes that the contribution of the mining boom was smaller than many have calculated; consequently, the challenge faced by the Australian economy is far less onerous than many believe. Edwards said the economic resilience and flexibility could be propped up by improving the quality of the bureaucracy and teachers, and better leadership in government and business. Yet he highlighted the biggest impact will be the career choices of young people.
Meanwhile, positive U.S economic data supported the greenback and saw the Australian Dollar leave its almost three-month high of $0.9444. Australia's currency traded in a tight range on Tuesday, after upbeat overnight fundamentals from the U.S., particularly a better-than-expected US Purchasing PMI. U.S macroeconomic data will have an impact on the Aussie, as the Australian calendar offers few important events this week.
© Dukascopy Bank SA