Australia suffers with business funding

AUD/USD has fallen more than 25% since it traded above parity at 1.05 against the dollar on April 2013. The pair is currently trading at 0.78 level. We believe this trend to continue despite any short term revamp.

The Australian economy has faced several windfalls since namely the slowdown in china, its biggest commodity trading partner.

Today we thought to take a look at the domestic sector and growth in credit. We see from the latest data & charts by Reserve Bank of Australia.

• The Australian economy is suffering from a business funding slack. Funding has a long way ahead to reach to the pre-crisis level. 

• Business funding growth through especially intermediaries is lacking a lot. Currently this channel provides around 3% compared to 12% before 2008 financial crisis.

This slack in the domestic economy reiterates our view of a sluggish Australian economy, which might prompt the Reserve Bank of Australia to cut rates further.

RBA governor Stevens: Further fall in AUD likely to occur

RBA Governor Stevens appearing before the Australian parliament's House of Representatives' Standing Committee on Economics.

• Says says economy growing at below trend pace
• Says inflation is low and appears likely to remain so
• Further fall in AUD likely to occur
• Says commodity prices have fallen quite sharply in some cases
• Says monetary policy still has capacity to give additional support to economy
• Fall in key export commodities hurting Australia's terms of trade
• Says mining downswing will accelerate this year
• Bank's forecasts assume lower path for interest rates, but is not a commitment to action
• Says domestic demand outside mining mixed
• Public sector spending still fairly subdued
• Says working with other regulators on managing potential risks from rise in housing investment
• Developments in the Sydney housing market remain concerning; not alarming elsewhere
• Mone to come etary policy is still able to give extra demand support
• Possible that monetary policy's "power to summon up additional growth in demand could, at these levels of interest rates, be less than it was in the past"
• Unwise to react to one monthly jobs number
• Says unemployment has been edging up, to keep happening for little while yet
• Says unemployment remains low by historical standards