THE DISTILLERY: Dollar daze

Calls by former Reserve Bank board member Warwick McKibbin for the central bank to bring down the value of the Australian dollar have made a big impact on the debate about yesterday's rates decision. This morning, jotters wonder how, if and when the RBA might respond – one thinks it would have lowered rates if it was truly concerned about the currency, while another thinks subtle intervention has already begun. Meanwhile, scribes give Transurban's latest results a broad tick of approval, while Leighton hasn't won back the trust of the commentariat just yet. Elsewhere, there are guesses as to what's in today's NBN corporate plan.

But first, The Australian Financial Review's Alan Mitchell is fascinated by the Reserve Bank's comment that the Australian dollar remains high, despite a decline in Australia's terms of trade and a weaker global outlook.

"The statement implies that the RBA thinks the dollar is in danger of rising too high for the economy's good. However, the fact that it didn't take the opportunity to cut interest rates on Tuesday – the most obvious response to an overvalued currency – also suggests that it is not sure that the dollar has reached that point yet. …Of course, if the dollar keeps rising against the currencies of our major trading partners at the current rate of more than 2 per cent a month, that might quickly change."

Business Spectator's Stephen Bartholomeusz wonders how effective any unorthodox moves to bring down the value of the Australian dollar would be, given the nation's apparent emergence as a safe haven for investors.

"The problem with intervention is that the dollar may well be trading at or around its fair value, given the relativities between the economic fundamentals here and in other major developed economies."

Meanwhile, Fairfax's Peter Martin reckons the Reserve Bank's noise about the rising Australian dollar is intervention in itself – a conscious attempt to let the market know it thinks the currency is higher than can be justified by the usual metrics. He calls it an "open mouth" operation to hold back the Aussie.

On the rates decision, Fairfax's Michael Pasco seems pretty chuffed that the Reserve Bank has been able to pick a cash rate that now seems "just right". Similarly, his colleague Malcolm Maiden doesn't see an obvious rate-cut trigger looming.

Of course, as The Australian Financial Review's new recruit Christopher Joye points out, " the uncertainties associated with the guesses of economists more than a month or two ahead are so high that they are not normally worth the electricity expended on communicating them." Presumably that goes for business journalists, too.

In company news, Fairfax's Eric Johnston has an interesting take on US accusations that Standard Chartered "schemed" with Iran's government to hide transactions: they could play into the hands of the bank's Asian rival, ANZ Bank, which has been growing its presence in emerging markets.

"All this, including the prospect of strict US monitoring, is something that could represent a major turnoff for Standard Chartered's Asian-based clients. Bigger rival HSBC is also likely to be distracted for the medium term after its apology last week for 'shameful' systems breakdowns that failed to stop it laundering money for terrorists and drug barons. …HSBC will also spend $US400 million beefing up compliance around the world, something that could again put emerging market customers offside."

Meanwhile, jotters are impressed with the first public performance by Transurban's new chief, Scott Carlton. The Australian's John Durie blame's the market's negative reaction to Carlton's first earnings report on a tiny increase in the company's payout – "it's the dividend, stupid" – while Malcolm Maiden argues Transurban is entering the "defensive sweetspot" for investors searching for a safe bet.

In other earnings news, The Australian's Damon Kitney thinks the biggest surprise out of Leighton was that there were no awful surprises. The Herald Sun's Terry McCrann thinks the company has embarked on an "all-new beginning", but Fairfax's Adele Ferguson says the company has "a long way to go" in repairing its reputation.
At The Australian, Criterion columnist Tim Boreham reckons Ansell looks like an even better investment after it bought European-focussed glove-maker, Comasec SAS. With new exposures to sectors including utilities, food-handling and polyurethane-dipped gloves, he says "Ansell offers protection in more ways than one."

Finally, The Australian Financial Review's Chanticleer columnist, Tony Boyd, guesses at what NBN Co chief Mike Quigley might reveal in today's corporate plan for the national broadband network. While cost blowouts are expected to weigh on the project, Boyd sees early signs the NBN will deliver higher revenue earlier than expected. If the plan comes out as advertised, The Australian's John Durie argues, Communications Minister Stephen Conroy will be justified in arguing the changes are not significant, given the scale of the project.