RBA Faces Pressure on the Dollar

The Reserve Bank of Australia is facing pressures to rein in the Australian dollar as the US Federal Reserve recently issued a statement, asking the world to help the US economy.

The Australian dollar remains strong as it reached its four-month high. The US, however, continues to suffer from a sluggish economy.

Just recently, the US Federal Reserve announced a new stimulus plan. In an effort aimed at monetary easing, the Federal Reserve is pushing for lower interest rates to purchase billions of mortgage-backed bonds. The bonds are worth about US$40 billion.

According to Federal Reserve chairman Ben Bernanke, the stimulus plan is to help hasten economic recovery.

Treasurer Wayne Swan welcomed the new stimulus plan, saying it is a step towards a positive development for the US. The Treasurer also said that although there is still such a long way to go before the world can address global challenges, recent weeks have been encouraging.

Swan cautioned that despite a strong dollar, the Australian economy is not immune from economic challenges. He, however, expressed that the country has solid economic fundamentals.

The Australian dollar is also enjoying a four-month high and has climbed US$ 4 cents.