RBA board member John Edwards, who told Ticky Fullerton on ABC’s The Business that he thinks the dollar should be lower. Edwards echoed comments made earlier this week in RBA governor Glenn Stevens’ post-board meeting statement that an “appreciating exchange rate could complicate the adjustment under way in the economy”.“I think we’d be better off if the dollar was lower, and quite a bit lower,” Edwards said.
Although he added “it does complicate things but it doesn’t complicate things quite as much as it might. Our exports have been doing pretty well in volume terms they’ve been up well”. Asked where he see’s the dollar going forward Edwards said, “I wouldn’t even guess, we’ve had commodity prices not falling as they were, in fact they’re up a little bit compared to January”.
Edwards also noted that the Aussie dollar strength was a result of actions by central banks around the world.
“We’ve seen somewhat easier monetary policy adopted in Europe and Japan even compared with where they were and a more cautious approach to tightening in the US so that hasn’t helped either,” he said. On the outlook for interest rates Edwards reiterated the governor’s comments that “low inflation does provide scope to do more if we need to do more”. “But that wasn’t the case at this meeting,” he added. The fact that Edwards said that he is more concerned about the global economy now than last year suggests perhaps it might be the case in the future.
Aussie is currently being traded around 0.7550 area. Pair is likely to find support around 0.75 handle and resistance above 0.7630 level. There will be no major data releases later today.
