RBA’s Harper: Fiscal stimulus to counter lockdown drag – MNI

Dhwani Mehta FXStreet

Fiscal stimulus deployed in lieu of the extended COVID-19 lockdowns should mitigate the impact on employment and growth, the Reserve Bank of Australia (RBA) board member Ian Harper said in an interview with MNI.

Additional quotes

“While there is downside risk, both state and national governments have moved quickly to provide fiscal relief.”

"If the downturn [in China] is mostly consumption rather than investment, the impact on the iron ore price will be very limited."

“Highs for iron ore prices had not had a major impact on the Australian dollar, so any reversal "might not bring it so low.”

“International and state border closures have affected industries traditionally reliant on migrant labor, but it was unclear whether this was producing wage rises in these industries.”

Earlier today, Australian authorities extended a lockdown in Sydney by at least 14 days, after three weeks, as the Delta covid strain cases spread over to Melbourne.

Market reaction

AUD//USD has pared back gains, now trading flat at 0.7446 amid covid concerns. The downside remains cushioned by the US dollar’s weakness, as all eyes remain on Fed Chair Powell’s testimony.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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