ABC finance analyst Alan Kohler gives insight into the falling Aussie dollar, it’s relationship to Biden’s withdrawal from the US election campaign, and the Sahm recession rule.
Category
📺
TVTranscript
00:00I don't know whether the Aussie dollar fell today because Joe Biden bowed out yesterday,
00:06but it's been falling for a week, and although the decline did accelerate a bit in the past
00:1124 hours, that had nothing to do with the US dollar.
00:14The currency is now 66.6 US cents, down a full cent since last Monday.
00:20Asian markets were mixed today, Tokyo down more than 1%, Hong Kong up 1% after a Wall
00:26Street fall of 0.7% on Friday.
00:29The local share market dropped 0.5% today, but that seems to have been more the result
00:33of Friday's fall in New York than anticipation of another one tonight.
00:37But we'll see, of course.
00:38Banks, miners and tech stocks all fell, retailers went up.
00:43On commodity markets, oil and gold went up, iron ore and copper fell.
00:47Now the American election campaign is being fought with an economy close to recession,
00:52at least on one measure, called the Sarm rule, after the US economist who thought of it,
00:57Claudia Sarm.
00:58She said it's a recession if the three-month average of the unemployment rate rises by
01:03half a percent from the previous low, which a lot of people think is a better way to decide
01:08it than the usual two consecutive quarters of negative GDP, because jobs are more important
01:14than production.
01:15So this here is a graph of the Sarm rule, and it shows that on this basis, both the
01:20US and Australia are close to recession, even though GDP is still growing.
01:26And that's finance.
01:28And that's economics.
01:29And that's economics.
01:30And that's economics.
01:31And that's economics.
01:32And that's economics.
01:33And that's economics.
01:34And that's economics.
01:35And that's economics.
01:36And that's economics.
01:37And that's economics.
01:38And that's economics.
01:39And that's economics.
01:40And that's economics.
01:41And that's economics.
01:42And that's economics.
01:43And that's economics.
01:44And that's economics.
01:45And that's economics.
01:46And that's economics.
01:47And that's economics.
01:48And that's economics.
01:49And that's economics.
01:50And that's economics.
01:51And that's economics.
01:52And that's economics.
01:53And that's economics.
01:54And that's economics.
01:55And that's economics.
01:56And that's economics.