Negligible AUD/USD Rise as RBA’s Lowe Says Aussie Economy is Outperforming Other Developed Nations

Australia’s economy is currently better placed than those of its industrialised peers, Reserve Bank of Australia Assistant Governor Lowe said on Thursday. “Unlike many other advanced economies, employment has recently grown strongly and the level of investment remains high,” Lowe told an audience in Sydney. He said that “the central scenario for Australia over the next few years remains a positive one”. Addressing the global economy, Lowe added that risks remain in industrialised nations and in Asia. Focusing on one of the latter region’s major players, he said that there’s a danger of China’s economy overheating if Beijing doesn’t reduce its stimulus. On the domestic front, Lowe said that inflation will remain in target over the next two years. Although the central banker refused to give any hints on the RBA’s monetary policy tightening cycle, he said the bank’s cash rate “has been far from normal”. The AUD/USD firmed by an essentially negligible 7 pips to $0.8979USD following Lowe’s speech. The Aussie dollar’s restrained move can be explained by the fact that the central banker didn’t tell markets anything they didn’t already know.