For months on end we have heard the RBA gang talk about how an interest hike is ahead and how low the AUD should fall for a level of comfort.
We noted earlier that interest rates hikes are undesired at this moment as US bonds are not yielding enough for FI to be leaving our shores.
However, post the G20 summit it appears that the tune has vastly changed. With 0 and close to 0% interest rates in much of the developed parts of the world – the RBA seems to finally realise that record lows mean nothing. 2.5% is simply no low enough.
The Aussie Dollar refuses to go below the .85 cent mark. And as we noted earlier there is much more to give in terms of interest rates to achieve the low 80s and/or high 70s desired goal.
With China showing signs of weakness and lowering the interest rates Australia must take suit shortly.