This is from a bank fx commentary I received this morning. Strong words from the RBA governor & also lends to why I think Aussie gold will out perform. I'm looking for circa 85c in the AUD over the next 6 to 9 months, possibly a little lower.
During his speech yesterday Stevens said the “$A is not doing as much as it might do to balance growth”, and “risk that $A will fall materially is underestimated”, he also went on to use the word “intervention”, but only saying it is on the table if required.
Last night’s Fed Minutes of course franked their July statement – they no longer view the unemployment rate as ‘elevated’, and inflation is ‘somewhat closer to the longer-run objective’. Naturally, markets interpreted this as meaning the rate hikes are coming sooner rather than later.
Across the Atlantic, Bank of England Minutes showed that 2 of 9 members wanted to hike rates at their last meeting. This is the first time in 3 years they have had a split decision.