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

 

Gordon Campbell: On Tiwai Point (And Saying “No” In Greece)

Its hard to see how Rio Tinto’s one month delay in announcing its intentions about the Tiwai Point aluminium smelter is a good sign for (a) the jobs of the workers affected or (b) for the New Zealand taxpayer. More>>

ALSO:

Half Empty: Dairy Product Prices Extend Slide To Six-Year Low

Dairy product prices continued their slide, paced by whole milk power, in the latest GlobalDairyTrade auction, weakening to the lowest level in six years. More>>

ALSO:

Copper Broadband: Regulator Set To Keep Chorus Pricing Largely Unchanged

The Commerce Commission looks likely to settle on a price close to its original decision on what telecommunications network operator Chorus can charge its customers, though it probably won’t backdate any update. More>>

ALSO:

Lower Levy For Safer Cars: ACC Backtracks On Safety Assessments

Dog and Lemon: “The ACC has based the entire levy system on a set of badly flawed data from Monash University. This Monash data is riddled with errors and false assumptions; that’s the real reason for the multiple mistakes in setting ACC levies.” More>>

ALSO:

Fast Track: TPP Negotiations Set To Accelerate, Groser Says

Negotiations for the Trans-Pacific Partnership will accelerate in July, with New Zealand officials working to stitch up a deal by the month's end, according to Trade Minister Tim Groser. More>>

ALSO:

Floods: Initial Assessment Of Economic Impact

Authorities around the region have compiled an initial impact assessment for the Ministry of Civil Defence, putting the estimated cost of flood recovery at around $120 million... this early estimate includes social, built, and economic costs to business, but doesn’t include costs to the rural sector. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news