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Australian dollar punishing the RBA

The Reserve Bank of Australia hasn’t done itself any favours by providing no real hints that interest rates will fall below 1.5%, as the resulting strengthening in the dollar will make it even harder for it to raise inflation back to the 2-3% target. The RBA will soon have to decide whether to come out fighting and try to weaken the dollar or to hold on and hope that the US Fed comes to the rescue soon.

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