“Australia’s Treasury secretary said the local currency will stay elevated “for some time,” a rise the central bank signaled would help contain inflation spurred by the nation’s biggest mining-investment boom.
“The Australian dollar, which is currently at record levels, can be expected to move roughly in line with the terms of trade over the longer term,” Martin Parkinson, the Treasury’s top bureaucrat, said in a speech today in Sydney, referring to a measure of export income. “It is therefore expected to also remain persistently high for some time.”
Reserve Bank of Australia Governor Glenn Stevens has kept the benchmark interest rate at 4.75 percent after seven increases in the overnight cash rate target from October 2009 to November last year, moves that contributed to a 21 percent gain in the currency in the past 12 months.
“If economic conditions continued to evolve as expected, higherinterest rates were likely to be required at some point if inflation was to remain consistent with the medium-term target,” RBA policy makers minutes said in minutes of their May 3 meeting released in Sydney today.”
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I read thru the actual minutes, the RBA is actually imho less hawkish as before, AUD/USD agrees with my analysis which is a tad lower after everyone actually read thru it.
Perhaps your right, but if the currency floats higher without a rate hike, (over time,) then it is as if they have raised rates….plus they must be mindful of a reversal in commodities.
Nice call anyway!