Nice jump overnight in the value of the AUD. Analysts keep predicting a drop but our dollar resists the predictions.
<sarc> Go on, celebrate how your overseas holidays and imported consumer goods are going to be ~2% cheaper in AUD, assuming the retailers don't just absorb the difference by maintaining their AUD price margin. Never mind how Australian exports, already uncompetitive, become even less competitive on international markets. Never mind how a long-term trade deficit racking up debts your grandchildren will still be paying for. You'll be dead and gone when that happens, so who cares, right? </sarc>
Our balance of trade is positive at the moment, we have been recording a trade surplus this year. We could push interest rates down towards zero and play the currency devaluation game like China, but I'm sure there at significant downsides to that as well (imagine the impact on the housing market).
A strong currency is always more preferable to a weak currency. It means our terms of trade are higher and we don't need to work as much to buy the fruits of other people's labour. See THIS THREAD
No they'll just order the banks to change LVR requirements and choke out the 5% equity people. A third deposit requirement would slow the market down.
The government has a vested interest in the housing market and I doubt they'd mandate a specific LVR by regulating the banks. That should have been done long ago.
But it also inflates our production cost of everything, deterring self production and export and promoting import. Out propped up dollar is a key reason why our manufacturing sector has all but closed up shop.
The AUD just got trashed by the release of higher unemployment numbers. Any rate hike this year is very likely off the table. Sideways all the way. Probably not much positive news ahead. One economist summed it up nicely:
