Yes the Aussie is high, however 3 - 4 US rate rises will bring it under 75c. From there the carry trade will also have an impact of USD buying pushing our Aussie lower as well. The Aus economy ain't crash hot across a number of areas.The only saving grace at the moment is commodity prices, however a little bit of a correction and the Aussie goes down. You also have Trump economics in play and he is OK with running deficits so the USD won't be running like a bull.
I am of the camp that the RBA will be able to raise rates once this year, regardless of inflation.
The whole thing about inflation is dead. Wasn't QE supposed to make is easy for businesses to borrow cheap and lend out so that inflation rises? That went well, all companies did was park the money with respective reserves (even if they were negative rates), do buybacks, cut costs, etc. The natural world economy has been manipulated by fiscal and monetary policies where the end result has seen asset prices and debt balloon. I was reading an article the other day where it looked at the US Fed over the last few decades and recessions occurred when the US Fed started the cycle of raising rates as they were always behind the curve with inflation jumping. Will it be the same again ... who knows. Music can't keep going on forever ...
