Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Australian dollar above 'fundamental value', RBA says

Australian dollar above 'fundamental value', RBA sees slack in labour market

By Jonathan Underhill

Sept. 2 (BusinessDesk) - The Reserve Bank of Australia strengthened its language on the Australian dollar, saying the currency was high relative to fundamental value, while at the same time sounding more upbeat about the local economy.

The RBA kept the cash rate unchanged at 2.5 percent and continued to say a "period of stability" in interest rates was warranted given the outlook for inflation.

On the Australian dollar, governor Glenn Stevens said it "remains above most estimates of its fundamental value," especially given the decline in commodity prices. In last month's review, he only noted the currency was high by historical standards.

The Australian dollar last traded at 92.98 US cents, having fallen from 93.33 cents in the course of the day, after current account figures were revised showing a weaker track over the first half of the year. In July it was as high as 95.04 US cents.

The latest statement notes gradually improving business conditions and a recovery in household sentiment. It also firmed up its view of investment in parts of the economy other than resources, where there is continued decline. Now they are said to "continue to improve".

Another change to the language was to drop reference to there being a low probability of any rise in global interest rates, as it had said last month.

Much of the statement was little changed from what Stevens said in his Aug. 5 statement, where he also kept the rate unchanged along with the wording on the outlook for inflation, which would remain within its 2 percent to 3 percent target range over the next two years.

Stevens was dimmer about the Australian labour market, especially given government figures since last month's statement showed the jobless rate rose to a 12-year high in July. He noted the labour market had "a degree of spare capacity" and it would be some time before the rate declines consistently.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Balance Of Trade: NZ Posts Trade Deficit In October On Falling Dairy Exports

New Zealand’s posted its largest monthly trade deficit for October in six years, while narrowing the shortfall from September, led by a fall in dairy exports to China while all main imports into the country rose. More>>

ALSO:

Gigatown Winner: Plenty Of Positives For Dunedin

Although the city has taken the Gigatown title, along with new ultrafast 1Gbps broadband and funding for $700,000 worth of UFB-related initiatives across the community, Mr Cull says Dunedin has gained so much more through its involvement. More>>

ALSO:

R18: The Warehouse Group Praised For Removing Games

The decision by New Zealand’s largest retailer The Warehouse Group (TW Group), to withdraw stocks of the latest version of Grand Theft Auto V (GTA V) and other R18 games, has been praised by advocacy group Stop Demand Foundation. More>>

ALSO:

Air NZ Wine Awards: Victory For Villa Maria As Pinot Noir Thrills

It was a night to remember as Villa Maria Estate picked up one of the highest accolades of the evening, the O-I New Zealand Reserve Wine of the Show Trophy, at the 28th Air New Zealand Wine Awards. The Villa Maria Single Vineyard Southern Clays Marlborough ... More>>

ALSO:

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news