RBA Gov Says Rate Moves Need To Be Pre-emptive

Forex News: RBA Governor Stevens, speaking theoretically, says monetary policy needs to be adjusted before inflation reaches a desired level. Two dealers say market seems to be reading comments and subsequent media reports out of context as indicating RBA may cut, resulting in drop in AUD/USD to 0.9754 from 0.9794 before comments; say drop likely to be short-lived. But comments not really surprising and consistent with RBA's long-held policy of acting pre-emptively. "You shouldn't be waiting until it's really obvious inflation has gone all the way back down to where you'd like it to be before you've clearly got to start easing - you start easing before that," says Stevens. By same token, policy needs to be tightened before rise in inflation pressure is obvious