Aussie remains on the weak side despite a lift after RBA Governor Stevens and other Board members fronted the House Economic Committee earlier in the session. Despite traders universally seeing his comments as being somewhat hawkish, the overall feeling that $0.85 needs to be seen before any recovery can be sustained is pervasive. Stevens implied that yes, the RBA could cut rates again if necessary, but were unlikely to need to as a more important dynamic right now is improving confidence in businesses to borrow and cash-rich banks to lend, by improving structural supply-side issues such as productivity, workplace flexibility, strong infrastructure growth and moving towards a tax system that promotes innovation and growth. Direct intervention in the market was a possibility but he preferred to be ambiguous on the topic, seemingly tomaximise effect, but had also said that he had thought about intervention many times in the past few years but hadn’t. So it seems very unlikely here. The AUD rose from the $0.8890s to the $0.8920s, but ran into technical selling (worryingly, off very weak resistance on the hourlies) and drifted lower for the rest of the session, to sit just above $0.8900 as of writing.
