From the WSJ, it appears the RBA is taking its its dollar jawboning campaign to another level in New York:
WSJ: How can Australia maintain and grow living standards?
Mr. Stevens: I think there are reasons to be optimistic about Australia.
As a country, we have to get it. It doesn’t just land here in our lap. We need to be doing the various things that foster innovation and productivity.
…WSJ: Is Australia’s productivity satisfactory?
Mr. Stevens: We have to do better on output per hour.
…WSJ: Are cycles of boom and bust finished in Australia?
Mr. Stevens: We are building up this myth of 22 years of uninterrupted growth. We shouldn’t do that. It’s been 22 years since we had a deep downturn. We’ve had a couple of little ones, but they didn’t last long and they weren’t very deep.
Sooner or later we will have another one.
…WSJ: Are you impressed by the choice of Janet Yellen as the new chairman of the U.S. Federal Reserve?
Mr. Stevens: She’s not prone to a rush of judgment or impulse. She is very considered and that’s very important in that role.
…WSJ: How to handle China’s growing economic clout?
Mr. Stevens: I think it is pretty clear China is already a very large economy and it is getting larger. I would assume that in the next decade its financial weight will grow along with its economic mass. That will be important.
WSJ: Is Australia too reliant on China?
Mr. Stevens: Well, what’s the alternative? Say to China we don’t want to sell to you. China has a cycle and we will feel those cycles more. And I think there are issues for economic policy in general there—how we manage that across the cycle, and how we think about it. But that’s not a reason not to engage with China, because it is still enriching us.
If it was aimed at the dollar it didn’t work with the currency up 30 pips on the open this morning.
