question for our Aussie friends

[Stan]

so why is everyone running to the au$ ?

Steriods? Drugs? Fosters?

[Bravus]

I think there are two main factors. One is that our interest rates are very high by current international standards. The prime rate is 4.75% I believe, while in the US it's 3.25%. Investors like to invest in countries with higher interest rates, so the currency rises in value. The second factor is the mining boom: we dig up the stuff China and India need to develop, and sell it to them, and have decades more of that to do, which supports our economy.

The two things are linked in part, because the mineral trade propped up our economy to a fair extent during the GFC. Prompt action by the Labor government and appropriate stimulus also meant we bypassed the worst effects of the GFC and have one of the most robust economies in the G20 at the moment. The reason interest rates are higher is because the reserve bank has had to raise them to slow inflation as the economy grows fast in the face of supply constraints...

(that may have been more detail than you were asking for!)

[aldona]

We've reached parity with the US$! Sound the vuvuzela and let's throw a Parity Party!!

Aussie Dollar hits parity

AJ

(rushing off to buy lots of stuff from the US on eBay)