Underperforming growth in China, improving economic conditions in the US, and the RBA’s recently announced cut in the cash rate to a record low of 2.75% have forced downward pressure on the Australian dollar – culminating in a loss of nearly 8% in value against the USD since mid-April. Crashing from its peak of $US1.10 in July 2011, the AUD has reached an 11 month low, with many analysts warning investors to brace themselves for further deterioration.
Inflation fear is an inflated fear
Australia’s inflation rate has reached an all-time high since the GFC but what does this mean for the Australian public? Anna McBride explores inflation’s relationship with two areas of consumer interest – wages and interest rates – to determine whether its increase should worry us.