- Philip Lowe, RBA deputy governor
The Australian Dollar eased back from this year's high against the U.S. Dollar, as bulls are facing strong resistance around 0.9150 and without a strong bullish bias, further appreciation is unlikely, especially keeping in mind comments from the Fed. With no crucial data in focus from Australia, RBA comments will attract the market's attention as they can give some hints about future policy moves.
Central bank's deputy governor Philip Lowe was the first to speak this week and the key message of his speech is that a long period of stable exchange rates will play a decisive role in economic development. What is more important, he refused saying the Aussie is at the "uncomfortable high" level against the U.S. counterpart. But does the RBA really wants a weaker Aussie?
The first step in the shift was already made, as Glenn Stevens used a phrase "historically high" instead of "uncomfortably high". Moreover, stronger inflation from the tradables sector can become a massive drag on the economy, showing another side of a weaker currency. While markets are focusing on CPI figures, import price inflation is also having a significant impact on the economy. This is especially important when almost 40% of the goods used by the ABS to measure consumer prices have prices determined externally, on the global market, rather than domestically.
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