Weaker Aussie dollar
There's been quite a bit of chat about the weak Aussie dollar being a concern for imported inflation, and a potential reason for the Reserve Bank to keep interest rates higher for longer.
Of course, it was thus nailed on that the A$ would inevitably start the week on a stronger footing...
It's worth noting that while the US dollar and exchange rate are obviously vitally important for Australia, it is only one of the currencies Australia trades in, not least because China is Australia's main trading partner.
This was in part brought to mind as I have to send some Aussie dollars to London next week, and I was relieved to see the dollar has actually been a tad stronger against the British pound sterling over the past week.
The trade weighted index has fallen, as one would expect given the significant weighting given to the US dollar, but not nearly as sharply.
The Reserve Bank of Australia's chart packs underscore the point (albeit, the below figures are only updated only to 5 December 2024).
Along with oil price uncertainty, this will undoubtedly be 'one to watch' in 2025.
Be alert, not alarmed ,as they say...
