Monday, October 20, 2008

Aussie dollar comes back to earth

Further to my previous post, here's the value of the Aussie dollar relative to my estimate of its purchasing power parity against the US dollar. Both the Aussie and the Canadian dollars are "commodity currencies" and they have both plunged pretty much in line with the big drop in commodity prices, only the Aussie dollar has fallen by more.

If you were thinking of leaving the US if Obama wins, Australian is now much more affordable. If my PPP estimate is correct, an American travelling in Australia should find that things cost about the same there as they do here. As recently as last July things probably cost about 40% more in Australia. This is good news also for those of us who like Australian wine.

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