foreseechange foreseechangeCharlie Nelson
Managing Director, foreseechange (www.foreseechange.com)
December 2000
The Australian dollar is set to recover in value, in terms of the Trade Weighted Index (TWI). There is a long lag between movements in Australian interest rates and the TWI. Rising interest rates since late 1999 should be having an impact from mid-2001. Another important factor is petrol prices – rising petrol prices cut the value of the Australian dollar, because world growth expectations are revised downwards. Our optimistic forecast is based on the assumption of a significant fall in petrol prices after the northern winter.
