We are not thinking of what size we might eventually cut rates byWill only discuss how big those moves will be when the time comesIf our rates are steady while others cut, it supports the Australian dollarNot discussed possibility of government overruling RBA on policy decisionsEven if headline inflation returns to 2% figure, it does not mean inflation is under control”Sustainably” means inflation coming back down and staying within target band consistentlyWe are not encouraging or discouraging anything with the exchange rateFocus should be on the trade-weighted index of the aussie, rather than AUD/USD
That concludes her press conference. Her last point on the exchange rate is definitely a fair one as AUD/USD is also largely driven by policy divergence between the RBA and Fed currently.
Looking at the trade-weighed index of the aussie via Bloomberg, it is only trading back up to levels seen in late August. It is currently seen at 62.40 and a far cry from the July high of around 64.50.
This article was written by Justin Low at www.forexlive.com.
