The Australian dollar recovered from four-week lows against the US currency on Friday, finding some lift after the central bank chief reiterated a tightening monetary policy bias. Reserve Bank of Australia (RBA) Governor Glenn Stevens said surging prices for the country's commodity exports would deliver the biggest boost to the economy in more than 50 years.
Despite signs that demand was cooling, the windfall from the export boom meant a tight monetary policy was still essential. Stevens also said a stronger Australian dollar, which hit a 24-year high late last month, was proving helpful in cushioning the expansionary shock from the trade boom.
His speech came after a slew of soft economic data, including weak jobs data and a slump in consumer sentiment, underscored views that the Australian economy was slowing rapidly and the central bank would not raise rates in the coming months. The Aussie dollar was at $0.9403/04 against the US dollar, up from $0.9374/79 late here on Thursday, and off a four-week low of $0.9327 struck offshore.
The Aussie has fallen over 3 percent against the US dollar this week after the latter rallied, bolstered by a string of hawkish comments from Federal Reserve officials which raised expectations US rates could rise later this year.