The focus of today’s Asian session was a speech by Reserve Bank of Australia (RBA) Governor Philip Lowe who spoke on the labor market and monetary policy at a webinar hosted by the Australian Economic Association.
Lowe said that Australia’s unemployment rate would need to drop further and stay at a low of 4% to lift inflation, a result that is not expected to happen until 2024.
He also said that it is difficult to determine when in fact full employment can be achieved, where we can expect continued growth in wages.
While difficult to determine, the unemployment rate needs to be at 4% consistently so that the Australian economy is considered to be operating with full employment, Lowe said.
The current unemployment rate is at 5.1%.
To help support the economy, the RBA kept interest rates unchanged at a low of 0.10% on Tuesday, and insisted that it would not raise rates until it met its employment and inflation objectives.
RBA forecasts show the Australian economy will not be able to achieve this until 2024.
Following Governor Lowe's speech, the Aussie dollar remained traded lower against the US dollar during the Asian session.
