Why Is The Aussie $ Falling?

You’ve just booked your first overseas holiday in three years and now the Aussie $ (A$) is on the slide.

What’s going on?

Well, there are two answers.

The first is a very sophisticated, intelligent sounding answer that includes interest rates, inflation, export and imports, wars, politics, and blah, blah, blah.

And then there’s the second answer which is much simpler and I reckon, just as accurate. Most importantly, it’s all you need to know.

There are three reasons the A$ is tanked recently.

1. Global panic in the markets about a possible recession has increased the demand for ‘safe haven’ currencies like the US dollar (USD). This in turn has weakened the demand for currencies like the A$.

2. China’s ‘zero’ covid policy has really hurt their economy. Consequently, there’s been little demand for Australian commodities (iron ore, coal) and therefore little demand for the A$.

3. Chinese student and tourist numbers have plummeted. If you want proof, just speak to any university lecturer. Their lecture rooms are almost empty. #zoom.

And now you’re probably wondering if the A$ will bounce anytime soon?

I doubt it. The global economy is a ducks breakfast at the moment and it will probably get worse before it gets better.

But don’t despair. If you could manage Covid you can manage whats coming.

This too shall pass.

Have a great weekend / holiday!

Adam