For as long as anyone could remember, we'd always had a large premium on our money market rates because, as a small economy, we'd always invested more than we earned and so we needed to borrow the shortfall offshore. That boosted the Aussie dollar.
When the pandemic hit, and everyone including us, slashed interest rates to zero, we were pretty much on a par with the US. We still are which is why the line is hovering around zero.Reserve Bank of Australia has signalled an end to rate hikes with a cash rate of 4.1 per centThere are good reasons for that. Our household sector has taken a beating from mortgage hikes, far greater than American households, which is showing up in a sharp fall in household spending.
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