ForexLive Asia FX news wrap: RBA Gov Lowe wants a lower AUD
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Forex
news for Asia trading Friday
14
August 2020
Reserve
Bank of Australia Governor Lowe appeared in front of a parliamentary
committee for one of his twice a year testimonies. In his prepared
remarks he stuck to familiar themes:
- economic recovery is dependent on COVID-19 developments (the outbreak and response in Victoria has delayed national recovery)
- sees the unemployment rate rising to 10% by the end of 2020 and a gradual fall thereafter
- has not ruled out a further bond buying program
- monetary financing of the government debt is not on the agenda
- the rise in public debt is manageable
- the RBA will do what it can, more if necessary, but more fiscal support is needed
Later
the Gov followed up with comments directly on the Australian dollar:
- would like it to be lower
- cannot say it is overvalued at present
- its no surprise the AUD is where it is, he does not have the tools
to get it lower
And
later he added more on that last point:
- would need huge amounts of intervention to push the AUD down
- doubt the RBA can do that
- intervention
would not be a successful strategy at presentations
As
I post AUD/USD is little net changed on the session. It had moved
about 15 or so points higher from its early low but has since
retraced.
NZD/USD
has followed a similar pattern and it too is back near session lows
in a small range only. There were further cases of coronavirus
reported from NZ today. Today is the day the lockdown in NZ is
supposed to end. As I post there has been no news on if this is still
the case or if it is to be extended, but a lockdown extension would appear
likely.
From
China we had economic activity data for July, both industrial
production and retail sales for the month came in under estimates,
with the more substantial, and more disappointing, miss on retail
sales. A languishing conusmer sector is not a positive for China
growth, it will remain slow.
EUR,
GBP against the USD followed a similar pattern to AUD AND NZD, and
also in tight ranges. USD/CAD is up a bare few tics net while USD/JPY
and USD/CHF are also little changed.
Gold
tracked more or less sideways around $1,955.
Still to come:
