Aussie higher on hawkish RBA

The Australian Dollar advanced more than 0.3% versus it U.S. namesake on Tuesday, hitting 0.92, following a speech by RBA Deputy Governor Philip Lowe, who pointed out companies have to boost efficiency in order to maintain growth in living standards, while engineers freed up from mining sector could be used to build more infrastructure. The main goal of the monetary policy is price stability, while Lowe also mentioned that the additional contribution of monetary policy to improving productivity growth is only modest. During the last few decades the Australian economy has benefited from high living standards; however, the government expects nation's terms of trade to fall substantially in the coming months, hence it will lead to a decline in living standards. According to the RBA, investment in infrastructure and transport in particular, will be crucial in boosting economic growth forward.

His comments are setting a slightly more hawkish tone for the RBA, suggesting rate cuts are unlikely to be the only fixing tool for hampered growth. Meanwhile, Lowe welcomed the recent slide in the Aussie, saying further declines are expected. Amid comments the Fed would start tapering its stimulus programme soon, the Australian Dollar plunged 2% during the last week.