Another day, another failing fiat currency — Australian dollar forecast: Warning it could drop to as low as 40 cents to USD

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Economist and philosopher John Maynard Keynes is famous for saying that markets can stay irrational longer than you can stay solvent.

As the Australian dollar (AUD) plunges, Aussie importers and international travellers must wonder if he was referring to them. The AUD is once again swooning towards new lows.

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In truth, the currency has been getting whipped for more than a decade. There have been ebbs and flows, some lasting years, but a pattern of lower highs has been intact since 2011.

A tale of two superpowers

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So, are the recent falls irrational? The answer lies in the relative prospects for our two great and powerful friends, the US and China.

It is no coincidence that the AUD has almost perfectly tracked the rise and fall of Chinese catch-up growth.

https://www.news.com.au/finance/economy/australian-economy/warning-aussie-dollar-could-drop-to-40-cents-to-us-dollar/news-story/41f847277223d5baee83456828979090


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