Reasons to be optimistic for the 'Lucky Country'

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For a number of years Steen Jakobsen has been travelling to Australia with a somewhat downbeat message on the outlook for the local economy. Central to this has been the downturn in the commodity cycle and the significant rebalancing act that has had to take place. On his latest visit Jakobsen has delivered a more upbeat assessment, including a view that a Fed rate hike in December could also mark a bottoming of the commodity cycle. "I happen to think that the direction of the USD will be inversely correlated with the direction of the Federal Reserve policy... In 4 out of the last 5 cycles we have actually seen a peak in the USD to coincide with the first rate hike. Why am I telling you this? I am telling you this because it fundamentally changes the external factors that are so important for the Australian economy overall. I.E. A stabilisation of the commodity cycle." Watch the full interview for Jakobsen's views on the AUD and the RBA's next move.


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