Australia’s dollar declined for a second day after a domestic report showed the unemployment rate climbed to match the highest level since 2009 and ahead of U.S. data forecast to show consumer spending accelerated.
Architects of the float of Australia’s dollar, trading at a similar level to when exchange controls were lifted 30 years ago, say the currency must devalue and economic reform be renewed to avert a recession.
Australia’s economy expanded slower than economists forecast last quarter after households boosted savings, suggesting the central bank may need to do more to spur spending as a mining investment boom wanes. The Aussie fell.
Australia’s dollar, the world’s best- performing major currency of the past decade, may need to slump 40 percent to restore economic competitiveness as a local mining boom ends, said former government adviser Ross Garnaut.
The Australian dollar needs to weaken “by a large amount” to restore competitiveness eroded by two decades of prosperity, according to Ross Garnaut, who advised former Prime Minister Bob Hawke during the 1980s overhaul of the nation’s economy.
Australia, the fourth-largest wheat exporter, risked more climate-change damage than other developed countries partly because of the threat to its agriculture, said Ross Garnaut , the federal government’s adviser on the topic.