14 Jul 2014
RBA Stevens: Market underestimates probability of a material decline in AUD
FXStreet (Bali) - RBA Governor Glenn Stevens, gave an interview to the Weekend Australian newspaper, noting that the eventual increase in rates in the US could be the catalyst for a fall in the Australian dollar.
Key Quotes
"The eventual increase in rates in the US, likely next year, would be disruptive to global financial markets and could be the catalyst for a fall in the Australian dollar.
“The likelihood of some disruption in markets is probably pretty high because it always is when the Fed eventually changes course. It’s hard to see how most of those metrics would have the Aussie dollar quite this high.
“That’s why we’ve said that our sense is that some of the investors are maybe underestimating the probability of a material decline at some point, but I can’t say when that might be.”
Key Quotes
"The eventual increase in rates in the US, likely next year, would be disruptive to global financial markets and could be the catalyst for a fall in the Australian dollar.
“The likelihood of some disruption in markets is probably pretty high because it always is when the Fed eventually changes course. It’s hard to see how most of those metrics would have the Aussie dollar quite this high.
“That’s why we’ve said that our sense is that some of the investors are maybe underestimating the probability of a material decline at some point, but I can’t say when that might be.”