PERTH: The Australian dollar bounced back to a one-month high Wednesday after RBA governor Glenn Stevens hinted that no rate cut is in the offing and told economists to “chill out” over the holidays.
In a few words, the governor articulated that another rate cut in 2015 is not on cards and the apex bank will take a hard look on rates only by early 2016.
The result was that at 12.12 AEDT on Wednesday, the dollar traded at 72.60 US cents, up from 72.02 cents of Tuesday.
The RBA governor gave the crisp message during a speech on Tuesday night and indicated that the apex bank would wait until the first board meeting in 2016 before contemplating any rate cut, reports The Sydney Morning Herald.
The RBA governor told a gathering of business economists that he concurred with the argument for holding the cash rate target at 2 percent when the board meets on December 1.
“I’m more than content to lower it if that actually helps, but is that the best thing to do at any particular time?” Stevens asked, while replying to a question on the cash rate.
“We’ve got Christmas. We should just chill out, come back and see what the data says,” he added.
One more reason attributed to the spurt in Australian dollar is the unexpected fall in US dollar that came after a the release of dismal economic growth figures that showed decline in personal consumption, which was more than expected.
