The Australian dollar remains in a weak position against the US dollar, although it is trying to bounce back. The current quote in the AUDUSD is 0.6308. Relations with China are coming to the fore for Australia. The Prime Minister said today that Australia should cooperate with China wherever possible.

China has cancelled its planned block of macrostatistics for publication today. Amongst the reports were the GDP figures for the third quarter of 2022. The economy was supposed to have risen by only 3.5% y/y. For the PRC this is too low. The Australian exchange rate might have reacted negatively to the weak statistics.

According to one of the RBA’s assistant governors, we should expect further rate hikes from the regulator in the coming months. That said, the position is that the RBA will be able to achieve the same interest rate hikes as the major central banks at the expense of fewer steps.

As previously reported, the timing and pace of rate increases will be determined on the basis of incoming data, primarily the characteristics of household spending, wage developments, the state of the world economy and so on. One of the key policy objectives of the RBA is now to bring inflation back to the target level.