By Janine Perrett

If ever you want evidence of why so much time is wasted on market forecasts look no further than the recent performance of the Australian dollar.

Or to put it more simply, if ever you want evidence of why the currency bares no relation to what goes on in our country, look at the recent performance of the Australian dollar.

This week it rose above 77cents.

At the start of the year it hit lows of 67 cents.

Did anything we did in the interim have any bearing on it?

Did our economic performance change so radically?

Did our political masters do or say anything that could account for it.

Not on your life.

It is mainly a result of overseas factors totally outside our control. Most obviously the comments this week of US Fed Chief Janet Yellen warning that further interest rate rises in the US will probably slow.

Cue fall in greenback, cue rise in the Aussie.

So forget all the wild forecasts of recent months about how low we could go. Ignore this week's suddenly revised forecasts by some of how high it might go.

Fact is it all depends on what happens in the US; which these days means what happens overseas or namely China. We follow.

Just like the share market, which mostly follows Wall Street, which mostly has followed the oil price this year.

We could save a lot of money on expensive economists and investment bank analysts but then what would fill the financial pages.

And so much for the US fed nark, who recently criticised our RBA for "jawboning" the Australian dollar downwards. 

 

Like as if that is going to make any difference. It is all in their hands.