FX

RBA’s FSR: Expected that output will rebound as the economy gradually reopens

In its semi-annual Financial Stability Report (FSR), the Reserve Bank of Australia (RBA) noted that it “expected that output will rebound as the economy gradually reopens, reducing the risk to the financial system.”

Additional takeaways

Risks to financial stability from borrower payment difficulties have generally eased but remain.

Has been a build-up of systemic risks associated with high and rising household indebtedness.

Important that lending standards are maintained, and that the riskiness of system-wide lending does not increase.

Almost inevitable that at some point the cyber defences of a significant financial institution will be breached.

Market reaction

AUD/USD is testing daily highs at 0.7319 on the RBA’s FSR, as the US debt ceiling optimism is lifting the riskier currencies such as the aussie. The spot is up 0.04% on the day.

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