What happened to the Aussie dollar?

[mstevens]

25 minutes ago, Henryford said:

Do Australians care about the exchange rate? I thought they were all (property) millionaires.

 

Many are house rich but cash poor.

[AussieBob18]

23 hours ago, samran said:

Its pretty simple, the AUD is a commodity currency and for the past few years, a proxy for China.

On top of that, international funds are selling their positions and pulling money out of Australia, making the AUD weaker verus a basket currncies.

The upside? The whole reason Keating floated the dollar in 1983 was so when we get external shocks like this, a weaker dollar acts as shock absober for the economy. Our exports, as well as assets will be cheaper to purchase, and with that people keep buying and investing more than they would have done otherwise.

Whether it is enough to keep Australia falling into recession we will have to wait and see, but if ScoMo can pump prime the economy enough, it just might help do the trick.

The last thing you want is people being unemployed. Following the last recession in the 1990s, most people over 55 who lost their jobs never got another one back.

Actually, the last recession was 2008 - the GFC.  But your point is right - the lower $AUD helps exports. But the problem is that most Aus exports are done under an exchange rate basis on currency rate forecast ahead.  So the drop in actual live exchange rates does not affect the trading exchange rates for a long time.  But when it does take effect - good times ahead.

The recent fall in official interest rates - on top of previous falls and the economic outlook - has caused the latest fall.

Hate to say it - but maybe Labor would have been a better option in last election - they are useless at managing the economy and borders - but they would have spent and borrowed a lot and thus kept the interest rates up and dollar higher.  Maybe ScoMo will realise that spending is a good option at the moment - stuff the deficit when there is a global crisis and economic crash - hope so.