“Even with Australia’s borders closed for nearly a year, shutting down the country’s main international tourism and education services exports, currency appreciation remains a concern.“Reserve Bank of Australia (RBA) board member Ian Harper said Wednesday.
Harper added that “services only represent 25% of exports. The other 75% are commodities. “
On the value of the exchange rate, Sean Callow, Senior Currency Strategist at Westpac, has stated: “The conversation around the Aussie turns around when you leave the 0.7xxx region behind. The RBA could be dismayed by the breakout of 0.80But given that commodity price support is so strong, they should take comfort that the Aussie does not appear overvalued. It’s a headwind, but they saw worse in 2011-12. “
“A level as round as 0.80 is a milestone. There is also the possibility of option strikes or stop loss orders around that region”Callow added.
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