Aussie Drops on Report RBA's Edwards Said It's `a Bit Too High'by
The Australian dollar dropped versus 15 of its 16 major peers after the Wall Street Journal reported that central bank board member John Edwards said the currency is too strong.
The Aussie “has found a base, and I guess I would say I still think it is a bit too high,” Edwards is quoted as saying in the report. Edwards, who has been on the Reserve Bank of Australia’s board since July 2011, also said he would be more comfortable with a level around 65 U.S. cents, though he’s not confident a drop to that level would occur, according to the Wall Street Journal.
“What’s got the currency moving is that he’s nominated a figure,” said Richard Grace, chief currency and rates strategist at Commonwealth Bank of Australia in Sydney. “It has had an impact on the currency, but I think it’s important to stress that this is a personal view and not the RBA’s official policy or view.”
The Aussie dollar declined 0.7 percent to 71.06 U.S. cents as of 1:52 p.m. in Sydney and weakened 1 percent to 80.24 yen.
It is common practice for central bank board members in the U.S. and U.K. to voice their personal views and Governor Glenn Stevens has said he can’t prevent that happening in Australia, according to Grace. “The Australian dollar could end the week lower on these developments,” Grace said.