Australia's Hidden Stimulus Boosts Economy as Currency Lags Commodity Rebound

Australian policy makers were publicly frustrated by the currency's stubborn strength when commodities tumbled earlier this decade. Now they're conspicuously quiet as it fails to keep pace with resurgent resource prices.

Since the end of June, JPMorgan Chase & Co.'s real effective exchange rate for the Aussie has risen 4 percent, while Westpac Banking Corp.'s Australian export commodity index has soared by 43 percent. The mismatch is another reason why central bank Governor Philip Lowe is comfortable sitting on his hands: he's getting an easing of financial conditions without having to touch the monetary policy lever.