All the talk these days is about the euro, but it’s not the only horrendously weak currency out there.
The other sickly one you should be paying attention to is Australia. It’s not at a 4-year low against the dollar, like the euro is (in fact it’s only back to where it was last September), but note that all of the decline has come from just the beginning of May.
In fact, since the beginning of May, it’s the biggest loser according to the Sydney Morning Herald, which declares “Aussie Dollar In Freefall.”
So what’s up?
Well, it’s what everyone’s calling a “risk” currency, due to the Australian economy’s heavy commodity component and its exposure to China.
Whereas the euro fall is at least in part of the eurozone’s structural deficiencies, this is not: this is a commentary about the economy, so in a sense it’s an even scarier fall (though of course everything’s connected, and the troubles in Europe are cited as a cause of the currency’s fall).
Meanwhile, the benchmark Australian All Ordinaries Index was off another 1.6% last night.
Here’s the Aussie dollar over the past several months.