Flash: AUD strengthening modestly - BTMU

FXstreet.com (London) - The Australian dollar has strengthened modestly supported by comments from RBA. Lee Hardman, strategist at Bank of Tokyo Mitsubishi commented.

Key Quotes:

“Deputy Governor Lowe who stated overnight that “the threshold for
intervention though is fairly high””.

“However, he didn’t “rule intervention in or out” which has been a long-standing practice for the RBA”.

“Noting that “in the past, we have been prepared to intervene in the currency market when it’s clear the currency was misaligned or the market wasn’t working well.” “

“The speech also highlighted the main economic challenge the
Australian economy now faces as it “can no longer depend on rising terms of
trade and favourable demographics” to boost living standards which will
require an offsetting pick up in productivity. It echoes recent comments
from the Australian Treasury’s top economic forecaster David Gruen, who
stated that Australia should brace for the weakest income growth in half a
century in the coming ten years”.