Aussie Boom Continues-For Now

While concerns about a international slowdown prevented the RBA from implementing another rate hike, the Australian economy seems to be doing fine-at least for now. Export revenues (amd the trade surplus) is booming, and so is employment.

So for now, the Australian economy looks strong. However, even the modified mining tax that will soon be implemented by newly appointed Prime Minister Julia Gillard will hurt the mining industry, And perhaps even more importantly, a likely global cyclical slowdown or downturn will likely reduce the prices of Australian export commodities.

This means that great downside risks exists for the Australian economy-and for the Australian dollar.