Chungwoo: Australian Dollar Approaches Parity

Over the last few months, the Australian Dollar has risen over 15% against the USD, bringing the currency to a 23-year high. With parity (1:1 exchange rate) in sight, some analysts are beginning to draw parallels between the Australian Dollar and the Canadian Dollar, which skyrocketed to parity against the USD just last month. Both economies are rich in natural resources, relying heavily on them to drive exports. In fact, more than half of Australia's exports are comprised of natural resources. It is no surprise that as oil, gold, and a host of other raw materials have surged to record highs, the Australian economy has outperformed even the rosiest of expectations. With China's economic boom promising to keep raw material prices high for the near future, the prospects for Australia's economy, and hence its currency, are brighter than ever. What鈥檚 more, the basic divergence in growth is clearly tipping towards the momentum underlying the Aussie economy with consumer spending, business investment and export income promising strength for the economy and currency in the months to come.DailyFX reports: Australian Dollar: The Next to Reach Parity?