In what has become his customary role as the non-management spokesman for the central bank, RBA board member John Edwards is on the wires again this morning saying that the falling Aussie dollar is doing its job for the economy.
He told The Australian that the fall in the Aussie had resulted in a lift in export volumes for resources, farm product and Australia’s service industries.
Edwards highlighted that the Aussie was now back below the long-term post-float average against the US dollar but also noted that in TWI terms, the Aussie still needs to fall further against our major trading partners.
“We are getting into a range (for the dollar) now, in terms of our cross-rate with the US dollar, where we are getting back to our average level over the period since the (1983) float.
We haven’t seen as big a move in trade-weighted terms … I certainly think we’ve got room to move (lower) in a trade-weighted sense. There is no firm way of saying what level is appropriate, except to say to see it a bit cheaper is good.”
It’s also clear that Edwards, like RBA governor Glenn Stevens, believes that the next big leg lower in the Aussie will come from US dollar strength when Janet Yellen and her colleagues on the FOMC begin their tightening cycle.
“The sooner the Fed moves, the better for us,” he said.
You can read the full article at The Australian here.