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Why the RBA Really Doesn’t Appreciate 80-Cent Aussie Dollar

  • Export competitiveness comes under threat as currency rises
  • Australians are more comfortable with Aussie around 75 cents
General Images of Australian Currency
Photographer: Brendon Thorne/Bloomberg
Updated on

The Reserve Bank of Australia would really prefer if its currency didn’t trade above 80 U.S. cents, eroding the competitiveness of its exports sector just as the economy is trying to recover from the pandemic.

Since its float in December 1983, the Australian dollar has averaged 75.90 cents. Given this history, Australians tend to think that a 7 in front of it is about right; an 8 is getting high, while a 6 means something significant is happening offshore or there are problems at home.