Gareth Brown’s recent Doddsville piece on the commodities super cycle (Commodities super cycle: No room for fence sitters) reminded me of a speech RBA Governor Glenn Stevens made in October last year.
He referenced an article from The Economist, written a decade before as the Sydney Olympics were coming to a close (Australia’s game still to win):
As Sydney was presenting the new face of modern Australia to the world, the currency markets were giving a different verdict. At the end of the games’ first week, the Australian dollar fell to a record low of 53.63 cents against its American namesake. It did not stir much afterwards.
The Australian dollar’s fall is partly explained by the greenback’s remarkable strength, though it has under-performed even against the euro. But it also reflects a continuing belief among financiers and potential investors that Australia has yet to complete the transition from being an old economy, based on natural resources, to a new economy fired by information and other technology.
Amazing how much can change in a decade, isn’t it?
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