Early this morning the Royal Bank of Australia's Deputy Governor Lowe made a comment that was largely unnoticed by market participants. He mentioned the all-powerful " i " word. Specifically, he said that "they would not rule out intervention."
As members of the RBA watch governments around the world use rhetoric to cause their currencies to depreciate, it may be ready to do the same if economic conditions in Australia deteriorate. The RBA has repeatedly stated in their monetary policy statements that they consider the Aussie exchange rates to be higher then they should be.
If the RBA does decide to step up its rhetoric, the Aussie may fall at the same rate as the Yen has in recent history.
Royal Bank of Australia (RBA)'s Assistant Governor Debelle is scheduled to speak later today at 6:00 P.M. EST
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