Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
The Reserve Bank of Australia forecasts only a "modest" uplift to inflation over the next few years from weakness in the Australian dollar, said Assistant Governor (Financial Markets) Chris Kent in a speech on Monday.
While acknowledging the 14% decline in the aussie against the US dollar this year, Kent said the currency had fallen only 2% in trade weighted index terms as it had been supported by high prices for key commodity exports, which include iron ore, coal, and liquefied natural gas.
He said the Australian dollar had "moved broadly in line with its fundamental determinants", noting the currency's decline accorded with differentials in interest rates between Australia and other economies. Kent said much of the aussie's decline reflected the rapid and prospective rises in U.S. rates. The impact of the 2% decline in the TWI on inflation was estimated to be "relatively modest." Kent said a rough rule of thumb suggested the Consumer Price Index would be higher by only around 0.2% "over the course of a few years."
In late Asia-Pacific trade Monday, the Australian dollar was trading at 0.6335, down 0.45 cents on the day.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.