Australia’s central bank Governor Glenn Stevens said the local currency’s level isn’t supported by costs and productivity in the economy and the nation’s terms of trade are more likely to fall than rise. The Aussie dropped.
“The foreign exchange market is perhaps another area in which investors should take care,” Stevens said today in the text of a speech in Sydney. “It seems quite likely that at some point in the future the Australian dollar will be materially lower than it is today.”
The Reserve Bank of Australia has left the cash rate unchanged at a record-low 2.5 percent for the past two meetings as it gauges the impact of earlier reductions on the economy and the outlook for global growth. Stevens said China’s expansion remains “robust” and the U.S. appears to be “healing,” while noting the greenback had eased after the Federal Reserve opted against beginning a tapering of bond purchases.
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