by Stephen Roberts | Mar 30, 2015 | Economic Weekly, Laminar Economist Stephen Roberts
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Global economic readings were again mixed strength through March with signs of moderating economic growth in the US and China, but with improving readings mostly in Europe. In Australia, annual GDP growth moderated further in Q4 2014 and the monthly readings for January and February, notwithstanding considerable strength in housing indicators, imply further moderation in growth in Q1 2015. The major central banks retain very growth-accommodating monetary policy positions, including the US Federal Reserve where Chair Janet Yellen made it plain that while the Fed would start lifting the funds rate, it would not happen until later in the year and would be a cautious affair beyond that point. While the RBA did not follow up its February cash rate cut at its March policy meeting, it made it clear that more cash rate cuts were likely.
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by Stephen Roberts | Mar 24, 2015 | Economic Weekly, Laminar Economist Stephen Roberts
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by Stephen Roberts | Mar 16, 2015 | Economic Weekly, Laminar Economist Stephen Roberts
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The Australian dollar is a lot softer than it was at the height of the export commodity price boom earlier in the decade. The fall in the Australian dollar has been particularly impressive against the US dollar, down from around $US1.10 at the recent peak, to around $US0.76 currently. Yet, as the Reserve Bank keeps stressing, the Australian dollar still needs to fall much further if it is to help rebalance the Australian economy in the wake of the huge dent in Australian national income caused by one of the biggest collapses in commodity prices ever to impact Australia. If the Australian dollar does not fall much more to compensate for the decline in commodity prices (and the further decline that still seems to lie ahead) something else will need to adjust to assist the economy – most likely interest rates.
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