25 Oct 2013
Flash: Threshold for RBA intervention could be parity - Nomura
FXstreet.com (Barcelona) - According to Nomura Strategist Martin Whetton and Economist Charles St-Arnaud, the strong AUD is a major concern for RBA members, who see the recent appreciation as an impediment to accelerate growth in Australia.
Key Quotes
"The stronger AUD will likely slow the expected rotation from resource driven growth to non-resource driven growth by impeding the recovery in the exports on non-resource-related goods and services."
"We believe that we could reach a point where the RBA would be willing to intervene either verbally or by cutting rates to force a depreciation of AUD. We believe that the threshold for such intervention could be once the currency gets closer to parity with the US dollar, but could even happen before."
Key Quotes
"The stronger AUD will likely slow the expected rotation from resource driven growth to non-resource driven growth by impeding the recovery in the exports on non-resource-related goods and services."
"We believe that we could reach a point where the RBA would be willing to intervene either verbally or by cutting rates to force a depreciation of AUD. We believe that the threshold for such intervention could be once the currency gets closer to parity with the US dollar, but could even happen before."