JPY Daily News

RBA Governor Supports Strong Aussie Dollar

In a speech today, the Royal Bank of Australia (RBA) Governor Glenn Stevens said the strong Aussie dollar is helping to drive inflation lower and reaffirmed that current interest rates were at an appropriate level. Governor Stevens expects inflation to maintain its present rate with rising labor costs factored in.

Stevens' comments helped to push down the AUD in trading as hopes waned for another quick increase in Australian interest rates.

The AUD/USD is trading lower at 0.9750, down from an opening day price of 0.9785.

However, long term inflationary pressures remain in the fast growing Australian economy. A commodities boom has led the way for strong economic expansion. As such the RBA will not be able to maintain the current interest rate environment in the long term. This should lead to a stronger Aussie dollar. A near term target for the AUD/USD is the November high of 1.0181.

Current Time: 05/26 22:50 GMT

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