If you want to know what the muscular dollar is doing to the economy then it’s plan as day in today’s fourth quarter import/export prices from the ABS.
Export prices were down 2.4% quarter on quarter despite the iron recovery:
the internals show the widespread damage in crude materials:
On the import side, prices rose just 0.3%:
With widespread deflation across the basket:
HnH, re crude materials – I suggest this best reflects the dramatic drop in commodity prices ( i/o in particular) in fourth quarter.
It may even transpire that the very modest rise in import prices 0.3% reflects the relative ‘purchasing power’ of the AUD.
Any thoughts?
Yes, you can read it that way. To me, it’s too high and should be lower on the very falls you describe. That’s why we a have “floating” currency.
Darling of the fx markets!