Here’s a chart that might help explain why investors have not abandoned the Australian dollar, and why it has rallied almost six cents from a low of 87 cents earlier this year, from the Bureau of Resource and Energy Economics.
In its March quarter “Resources and Energy Quarterly” BREE says: “The outlook for Australia’s resources and energy exports remains positive.
“Although prices for most commodities are expected to moderate over the outlook period, the projected growth in export volumes of Australia’s key commodities will support growth in export earnings.”
That means that while prices on our exports are likely to fall as RBA Governor Glenn Stevens has often stated, the increase in volumes will actually add to national income.
Meaning: exports will continue to be a positive addition to economic growth long after the mining investment boom has ended.
Perhaps an understanding of this, or a belief in it, is why investors and traders in the Aussie dollar just keep buying the dip.
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