Deputy Head of the Reserve Bank of Australia Christopher Kent stated that the unemployment rate will remain high over the next two years. The reason for the increase in unemployment is the reduction of investments in the mining sector, as well as labor force growth due to immigrants. Despite this the representative of the RBA noted improvement of trends in recent months.
We should recall that the main driver of growth against decrease in investments in the mining sector should be the construction sector. Among the main risks to the Australian economy are the slowdown in China's industry and drop in iron ore prices on the world markets.
We expect a continued fall of the Australian dollar in the near future with the target of 0.9300, and keep a medium-term negative outlook.