“Australia continues to swim strongly against the global tide, shrugging off China’s slowdown, rotten commodity prices and a fast fading resource construction boom to chalk up good growth,” said Deloitte Access Economics partner Chris Richardson…..
“A stronger Australian dollar … could, if it is sustained, start to take the cream off the cake of the non-mining growth story,’ said Mr Richardson, “with some of the recent gains in tourism and international education potentially at risk, and the possibility of the blowtorch to the belly going back onto the nation’s long-suffering manufacturers and farmers.”
The Australian Dollar is too strong given the current headwinds facing the economy. Having closely tracked commodity prices since 2009, recent divergence has the Aussie rallying to test resistance at 80 US cents. Failure of negotiations among major oil producers, in Doha, to institute a production freeze, may be just the catalyst needed to spark another decline. This time with a target of 60 US cents.
* Target calculation: 70 – ( 80 – 70 ) = 60