The Aussie dollar responds to the reserve bank holding interest rates

ABC NEWS (Australia)

The Aussie dollar, didn't move today when the reserve bank announced its decision to leave interest rates on hold, and the local share market followed wall street lower. ABC finance reporter Alan Kohler has more.

Transcript

00:00Well, an outsider might have won the Melbourne Cup, but the favourite won the rate cut stakes

00:06half an hour earlier.

00:08As usual, there were three horses in that race.

00:10Cut, hike and hold.

00:11Cut and hike threw off their riders at the start and then ran the other way.

00:14But it didn't matter because no one had any money on them.

00:17All the money was on hold.

00:19So the Aussie dollar is steady tonight at 66 US cents.

00:23Here's 30 years of the RBA cash rate, and while it's up a long way from 0.1% in two

00:28and a half years, it's only just above average.

00:31But of course, the household debt upon which interest is paid is anything but average.

00:36In those 40 years, it's gone from 70% of income to 190% of income.

00:42The RBA also released its quarterly statement on monetary policy today with its annual confession

00:47of forecasting hits and misses.

00:50The big miss has been productivity since COVID.

00:53The RBA thought it would increase, but it collapsed instead.

00:57Big mistake, because as Paul Krugman said, productivity isn't everything, but in the

01:01long run, it's almost everything.

01:03I would add that that especially applies to its effect on interest rates.

01:08On the share market, Domino's Pizza got burnt after announcing that Chief Executive Don

01:11Mage will be retiring.

01:13Now, he's 55 and he's been working for Domino's for 37 years.

01:17So he started at 18 and he became CEO at 33.

01:21He listed Domino's in 2005 with a value of $135 million, and it's now worth $3 billion,

01:28selling pizzas around the globe.

01:30The market finished 0.4% lower.

01:34Shares fell in New York last night, but rose strongly in Japan and China today.

01:37And on commodity markets, iron, oil, copper and oil all went up between 1% and 2% while

01:42gold eased.

01:44And that's finance.

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