In 2001, all three of these factors have gone into reverse, yet the US dollar is over 5 per cent higher than at the end of last year. There is not much doubt that a lower US dollar would be better for the United States and the world economy in general. The fall in the Australian dollar has been, in my view, an overshoot.
It is not something I look upon with any comfort. But it is also something which we could not hope to prevent in the short term, short of drastic measures which in our judgement were not in the best interests of the economy, especially given the risks to growth from abroad.