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Why is the Australian dollar so weak?
Jacob Greber had a piece in the AFR lamenting the weakness in the Australian dollar, which as many observers have noted, has seen very little benefit from high commodity prices and a terms of trade at record levels, exceeding those seen during the last terms of trade boom in the early 2010s. In fact, this disconnect has been evident since about 2018. chart Jake laments the decline in Australia’s international purchasing power, suggests that this is the product of a ‘weak dollar strategy’ between 2014 and 2022 and argues that a weak currency will complicate the RBA’s conduct of monetary policy. What I think ... (full story)