Monday, June 6, 2011

The US Dollar

Going through the Economists' Daily Charts I came across some gems, but this one shows just how significant US Dollar decline has been since the bursting of the tech bubble in the early 2000s (and even more so since the early to mid-1980s). 

Remember that the fall of the Aussie dollar in the early 2000s was attributed to Australia's status as an 'old economy' by David Hale. Aaah wrong. But he wasn't alone. Most people thought that the rise of the Internet meant that commodity economies like Australia were in deep trouble. But then along came China changing all that. Now everyone thinks that commodity economies are the wave of the future. The lesson here is that things change and then they change again.

Tracking the Aussie versus the USD shows that the we have a long way to go to reach the heights of the early 1970s! I've added the AUD-British Pound rate for perspective. 

This is the latest historical date supplied by the RBA on a monthly basis. Since 2009 the AUD has risen further to be about 1.07 at the moment.

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