Flash: Thoughts on RBA Stevens testimony - RBS

FXstreet.com (Bali) - According to Greg Gibbs, FX Strategist at RBS, RBA Stevens testimony, while similar in tone to the recent policy statements, is slightly more supportive of higher rates.

Key Quotes

"At the margin it might be regarded as a little supportive of higher rates, since the Governor has emphasised that the current level of rates is working to support the economy, suggesting that further rate cuts may offer little additional support. However on the economic outlook he remains subdued, continuing to look for below trend growth, so rate hikes are equally unlikely."

"He has increased his pressure on government policy-makers to work harder to improve productivity and increase incentives to expand and invest, suggesting this may be needed more than further rate cuts."

"He has continued to talk down the AUD in a similar fashion to that now well know. In question time he was asked about intervention, and he again indicated that it was an option, but did not want to give any clear guide as to if, when or how."