Who's got the strongest dollar in the world?
For the first time since 1982, the Australian dollar is the highest-valued dollar in the world.
A U.S. dollar note is sits with an Australian 10 dollar and 20 dollar bill in this photo taken in Washington on Oct. 14. On Nov. 2, the Australian dollar became the strongest dollar in the world, surpassing both the American and Canadian dollars for the first time in almost 20 years.
Jason Reed / Reuters / File
After having recently come very close, and later fallen back somewhat, the Australian dollar today achieved parity and is off this writing trading very slightly above the U.S. dollar, who in turn is trading slightly above the Canadian dollar. As a result, the Australian dollar is now for the first time since July 1982, the highest valued dollar in the world.
The reason for today's rally is of the interest rate increase by the Reserve bank of Australia (RBA). And the reason why the Australian dollar is going better than the others is that the RBA is gradually tightening monetary policy, while the Bank of Canada is more passive and the Fed is planning "quantitative easing".
How long the Australian dollar will remain strong depends in part of course on just how much the RBA will continue to tighten, and how large the Fed's "quantitative easing" will be. It also depends on how much the prices of Australia's mining exports rise-or decline.
------------------------------
The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. This post originally ran on stefanmikarlsson.blogspot.com.