Mr Rainbow shoves foot in dollar mouth
Someone needs to muzzle the RBA’s John Edwards, from BS:
“We are getting into a range (for the Australian dollar) now in terms of our cross rate with the US dollar, where we are getting back to our average level over the last the period since the (1983) float,” Mr Edwards said. “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,” Mr Edwards said.
“On the whole, over recent days, we could be a little more reassured about the global outlooks,” he said.
Compare this with the Reserve Bank of Canada’s Stephen Poloz yesterday even though the Canadian economy is in a very similar position:
“Global economic developments have been quite disappointing,” he intoned. He cited the slide in oil prices and the slowdown in China. Greece is no big help, either. Besides that, “non-resource exports have also faltered in recent months,” which Poloz called “a puzzle that warrants further study.”
“The Canadian economy,” the governor concluded, “is undergoing a complex and significant adjustment.”
…”The facts have changed, quite quickly actually, in the last two to three months,” Poloz told reporters. “One of the big shocks in this outlook is the downgrade of investment intentions by the companies in the oil patch.”
The Bank of Canada has ”a fair bit of room to maneuver” if more stimulus is needed, Poloz said, citing tools Canada laid out during the financial crisis such as quantitative easing.
We deserve everything we get with jawboning like this.
