Stephen Koukoulas

We've got the budget in a few weeks and the AAA credit rating, which let's assume that it is maintained.

We're only one of nine countries, I think it is, that has the AAA credit rating from three rating agencies.

And so if you're a fund manager sitting in Boston or Tokyo or Frankfurt, you say, well, I want a nice AAA rated sovereign to invest in.

Oh, gosh, look at the Australian 10-year government bond yield at 5% or thereabouts, and the US is down in the mid to low fours, and the European yields are in the threes.

I'll put my money into Australia.

As soon as you buy an Australian government bond, you've got to buy Australian dollars if you're sitting in Germany or the US or Tokyo or somewhere else.

So they're the drivers.

And even...

The good old fashioned, this is the one that used to be on everyone's textbook, trade balances.

If you're creating a trade surplus,

like you're receiving more income for your exports than you're paying for your imports, that tends to drive the dollar higher.

So most of those things are in play.

That's why we're at 70 or nearly 72.

And it's probably why, gosh, forecasting currencies is a mug's game, but I'm a mug today.

We're probably going to see it grind higher.

I think the favourable factors confronting the Aussie dollar remain positive.

Yeah.

The good news is that it lowers the import prices.

So if you're importing-

Petrol, oil, the price is sort of moderated.