What is behind the rising Australian dollar?

 The Australian dollar has been riding high against the dollar in the past few months, after the transaction, the new float high of 110 cents in early May. Some economists point out that local units of storm surge is likely to remain limited in the coming months as the high frequency spectrum.

Heling Shi, Professor of Economics at Monash University in Melbourne, said in an interview with Xinhua that some device drivers high local factors.

According to Shi, the first quantitative easing monetary policy in the United States to promote the dollar lower against most currencies in the world, and the Australian dollar is no exception. In addition, the high unemployment rate in the United States has been reduced down, which hurt the country's economic recovery, investors point of view signs of emotion, so hot money into other countries, including Australia, in a stable state of the economy is busy.

Shi said the Chinese economy will maintain a fast track, it has a high demand for energy and resources from Australia, making the dollar even more appreciated. In addition, more and more Chinese investors are prepared to invest in Australian resources sector here, which led both to a large number of local units, and speculative demand.
Last but not least, Australia's high interest rates also attracted hot money from other countries to further promote the local unit, according to Shi.

Shiko Su, Australia KVB senior investment consultant, the local unit is expected to remain sluggish due to the U.S. economy and the debt-crisis in some European countries over the next few months high.

Su told reporters that local units will run longer time high, given the Australian economy is closely linked to the fact that China maintained a strong demand for Australian commodities. He said that this is not possible the local unit fell below 100 cents on the back before the end of the year.

However, according to Su, this is not possible, the Australian dollar will continue to work with the local economy, and even higher against the U.S. dollar hampered by floods and cyclones in Queensland.

It is also worth noting that the latest performance of the Australian economy does not seem to rise much further against the U.S. dollar back to the local unit.

Australia's gross domestic product fell by 1.2 percentage points on the previous first quarter, while the actual GDP growth by 1.7 percentage points.

The aftermath of the strong local unit, Shi said that everything has two sides. On the one hand, a strong local units will be cheaper imports, Australian consumers, on the other hand, it will make Australian exports more expensive, such as damage to agriculture and services, especially education and tourism and hotel industry career.

Shi believes that a strong local shares will hurt the Australian economy in the long term. He explains that to combat the export sector will lead to rising unemployment and weakened consumer, which would undermine the overall economy.

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