The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Thursday, May 31, 2012

Aussie trade-weighted currency down 8% from 2012 peak (charts)

So the UK had a big imported inflation problem as a function of a circa 25% decline in their trade-weighted exchange rate. Australia got the benefit of big imported deflation as a function of a 15% appreciation in our trade-weighted currency (see second chart). The interesting thing is that these dynamics are now starting to work in reverse quite sharply. While the UK TWI is rising, Australia's is falling. In fact, as you can see in the chart immediately below, Australia's trade-weighted index is down nearly 8% from its 2012 peak.