Reserve Bank of Australia (RBA) does not want a strong Aussie Dollar (AUD). AUD/USD is touching record highs. RBA is cautioning the investors that there is a risk of sharp fall in AUD. This warning by the RBA Governor had the desired impact. AUD/USD fell half a cent.
One reason for the caution was the historically high level of the Australian dollar, which Stevens said was “overvalued” given falls in prices for the country’s major commodity exports. The strong currency has been a thorn in the side of trade-exposed industries for months, forcing cost cutting and job shedding in some sectors. What it means is that the Australian economy is trying to rebalance itself from the recent mining boom.
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