Disliked5% interest rate is great... sort of.
Assume you are an American with xUSD to invest, you buy xAUD which earns 5%
The AUD drops from 1.07USD to 0.96USD... a loss of 10%
I was pretty good at maths in school, but I don't need knowledge of Maths to work out that our erstwhile American investor just got screwed. Simple arithmatic will do.
He makes 5% interest on an investment that has lost him 10% hard currency value... a 5% drop in 12 months, PLUS he must pay tax on the 5% if he banks it.
He has 2 choices now, he MUST leave his...Ignored
Just out of curiosity, do you see it recovering in the future (ie., > .97) ? Or do you envision a lower AUD for the next, say year or two?