Hi Michael,

We will indeed pay more for our imports and o/s travel (which is really just another import). Bummer.

However, we get more for our exports. FE and coal are our two biggest and are sold in USD, therefore we get more Aussie dollars. Education is now our 3rd biggest export and it becomes cheaper for students to come here. Ergo, more students = more Aussie dollars. Gold – same as coal & iron ore.

Basically, we become more competitive for anything we export, which gives the non-mining sectors (also manufacturing, tourism, other services…) a bit of relief.

It’s true that a lower Aussie is a sign of a weakening economy, with the end of the boom. a fairly sick global economy and so on, but it’s a definite plus for exporters.

Oh yes, another downside is that a lower Aussie imports inflation, so interest rate pressures should head up again over longer time frames, and ‘in theory’ that should see a currency once again appreciate as the cycle repeats

That’s my understanding of how it’s supposed to work anyway.