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

 

Statistics: Business Research And Development Up 29 Percent

Computer services and machinery manufacturing firms led the way in an almost 30 percent lift in business spending on research and development (R&D) in 2016, Stats NZ said today. Businesses spent $1.6 billion on R&D in 2016, up $356 million (29 percent) from 2014. More>>

ALSO:

China Shopping: NZ-China FTA Upgrade Agreed Among Slew Of New Deals

New Zealand Prime Minister Bill English and China Premier Li Keqiang signed off a series of cooperation deals spanning trade, customs, travel and climate change and confirmed commencement of official talks on an upgrade to the nine-year old free-trade agreement between the two countries. More>>

ALSO:

Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news