I agree it is a balance between short term and long term. I am suggesting that there will not be a lot of short term rise (may be up to 95 cents) but then it will fall back.
Keeping the rates at 0 is not sustainable. I would expect a rise to 0.5% in the next 6 months, then as you say longer term they will have to raise much higher.
Meanwhile Australia will probably put its rates up another 1% in the next 6 to 12 months. How far the rates go in the long term will depend on how the Govt funds its debt. It may use the windfall of the ETS to divert mooney for this purpose.
All a great study in macro economices.
THese of course are only opinions as economics is a great science in telling you what has happened and not in predicting what will happen which is the "art" of economics.
Regards
D
OZL Price at posting:
$12.35 Sentiment: Hold Disclosure: Held
