Our export partners have a healthy economy with a just as healthy appetite. The high demand for Australian commodities almost matches the high price willing to be paid for such commodities. New mining companies are starting up every week. The housing market is competitively priced. Unemployment is down. Our American cousins are envious of our stronger dollar. We have a sensible budget that is flying through the house. Don't worry everything is going to be fine. http://www.youtube.com/watch?v=Y_17Krhuwbc#t=36s.
If the drop continues then it will impact consumer sentiment as goods become more expensive. Add with the continuing declines in resource prices (even with a declining dollar) and further job losses, and we could soon see the Australian economy slide into a recession.
It will help mining though. Makes wages more competitive when those costs are added to production. At 1:1 with the price of iron ore we could lose the one leg we have left to stand on.
Just thought I'd update this thread, 0.83 was briefly touched today. During which the RBA reiterated that the AUD is still too high especially since a lot of Australian commodities are priced very low at the moment.
The RBA is now hinting at the possibility of a rate cut, although analysts see the current rate to continue through 2015 and into 2016. There was also this story which suggests rate cuts are needed but that they will also cause the property market to explode upwards:
If property prices increase incredibly wouldn't that worsen the economy, since we are in an income recession? ''Without that, the next government would be well advised to spend up big on infrastructure and build Victoria's skills, but that would take time.'' Good thing that the EWL is going to be cancelled lol (however I think its unlikely). "In regional Victoria, consumer and business confidence is low and there are few external economic drivers." I think the FTA with China will help regional Victoria especially the dairy farmers. The state produces 65% of Australia's milk and 80% of Australia's dairy exports. ''His calculations suggest Melbourne accounts for 17.7 per cent of Australia's economic activity and Sydney 22.6 per cent. Regional Victoria accounts for 4.3 per cent, about the same as Adelaide's 4.7 per cent. Regional NSW accounts for 8.6 per cent. Perth accounts for 9.6 per cent and regional Western Australia 6.8 per cent.'' I would of thought that WA would account to more of Australia's economic activity since they create a huge amount of GST revenue which is then redistributed to NT and TAS. LNG needs to be developed in NT.
