Australian dollar not overvalued says RBA chief.
Open demo account
FOREX trading implies serious risk and can result in the loss of your invested capital

The Australian dollar remains virtually unchanged in late in the Asian session today after an upbeat speech by the Reserve Bank of Australia governor Philip Lowe and a speech by US president Donald Trump.

At 3.35pm (AEDT) the Aussie dollar was trading at US76.42c up from US76.39c in yesterday’s trading.

Even though the Australian dollar has been one of the world’s best performing currencies this year with some calling into question it’s sustainability, governor Lowe noted in a speech earlier today that the central bank was not to concerned at the moment,

"It's hard to say that the exchange rate is fundamentally too high”,  Mr lowe noted, “that might change, he said, were the global outlook or global interest rates to shift, but on present circumstances, I struggle to say the configuration is leading to growth outcomes that aren't satisfactory."

The governor also noted that the RBA was taking a wait and see approach and should the situation change in the nearest future some adjustments may have be made,

“If the global outlook were to change and the exchange rate/interest rate combination led to growth being downgraded, then you could make the case that the exchange rate was too high," he said. "But at the moment I struggle to say the configuration is leading to growth outcomes that aren’t satisfactory.” he said. 

The currency experienced some volatility earlier in the day after Trump said that he would release his tax plan over the next few weeks and that it is going to be phenomenal.

If he announces his proposed plan which includes significant tax cuts the Australian dollar may come under pressure after the announcement,

 “The market has got fairly excited around commentary to US airline CEOs, such as we are going to be announcing something over the next two or three weeks that will be phenomenal in terms of tax” noted IG chief market strategist Chris Weston

The material published in on this page is produced by the FIBO group companies, and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Analyst

The world of trading has no boundaries

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 58% of retail investor accounts lose money when trading CFDs with this broker. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

IMPORTANT: Please be informed, that our services are available for Professional Clients only. Our website is currently under review for the implementation of the correspondent amendments.

Important notice
By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.