Aussie Recovers on Stevens’ Speech

The Australian dollar strengthened today as the statement of nation’s central bank Governor Glenn Stevens spurred the speculation that the Reserve Bank of Australia won’t cut interest rates.

Stevens spoke today to House of Representatives Standing Committee on Economics, telling about the uncertainty and problems of the global economy. Despite these challenges, the Governor was rather optimistic:

But at this point in time, our terms of trade are at a record high, while our unemployment rate remains low. Inflation bears careful watching, but we can keep it under control. Our banks are strong, our currency is sound and our sovereign credit position is in the international top tier.

The comment about inflation made economists speculate that the RBA hasn’t finished with tightening.

AUD/USD jumped from 1.0429 to 1.0497 today as of 8:50 GMT. EUR/AUD fell from 1.3780 to 1.3750, while earlier it reached the intraday low of 1.3713.

Tags:  australian dollar problems trade unemployment speculate intraday