On Monday, Reserve Bank of Australia Deputy Governor Andrew Hauser spoke at the Economic Society of Australia Business Lunch in Brisbane. Key quotes Economic forecasts are subject to huge uncertainty. Assume inflation stickiness due to weaker supply, labor market tightness. But spare capacity could easily be much higher, or much lower than we assume. Assume unemployment will rise only slowly, but risk of faster increase. Assume household consumption to rise in line with real incomes.
Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar. How does economic data influence the value of the Australian Dollar? Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency.