The Australian dollar slid today on the treat of an intervention from the central bank. Policy makers think that the Aussie remains too strong despite the recent drop.
Reserve Bank of Australia Governor Glenn Stevens said that he is not fully convinced that an intervention is an effective measure, but he does not discard it completely. Stevens explained:
In this episode so far, the bank has not been convinced that large-scale intervention clearly passed the test of effectiveness versus cost. But that doesnât mean we will always eschew intervention. In fact we remain open-minded on the issue.
The Governor was complaining for a long time that the exchange rate is too high and may hurt exporters.
AUD/USD drop from 0.9232 to 0.9156, reaching the weakest price since September 6, and AUD/JPY slid from 93.38 to 92.56 as of 15:00 GMT today.
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