Stevens Optimistic about Australian Economic Outlook
December 8th, 2009 Posted in Aussie - Kiwi
Name: Natalie
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RBA Governor Stevens spoke in Sidney today, sounding quite optimistic as to the state of the Australian economic recovery. He also hinted at further room for interest rate increases, stating that “the fundamental problem is actually that financial conditions are just too easy — that is, interest rates are too low — balance-sheet regulation won’t ultimately constrain credit growth”. The Reserve Bank of Australia increased the benchmark lending rate to 3.75% December 1st, the 3rd consecutive increase so far.
Rising consumer confidence, growing exports to China and a recovery in the housing market helped fuel the current optimistic economic outlook. Business confidence surged in November to the highest level since May 2002. GDP is expected to expand 0.9% in the third quarter and 0.5% in the final quarter of this year.
Despite the positive economic data and outlook, the AUD was hurt by the recent strength in the Dollar, currently trading below 0.9100 cents. However, with the expectations for further interest rate increases in Australian growing stronger it is expected the AUD to recover from the recent losses against the USD, likely returning to previous highs.
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Tags: AUD forecast, AUD prediction, AUD/USD trading, Australian Dollar, RBA
