If the Oz economy is so much better than the USA one, why has our dollar dropped so much recently against the greenback? — Arlene J Macdonald
We asked Amanda Tan, Currency Specialist, St George:
The main reason for the slump in the Australian dollar is overall financial market volatility rather than the Australian economy’s performance in relation to other economies. When the financial crisis hit in September and October, the Australian dollar started to rapidly depreciate.
Right now it’s fear driving markets rather than the fundamentals. Commodity prices are falling and this has affected the domestic economy and added to pressure on the dollar.
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