Lower interest rates mean different things to different currencies.  Since the Reserve Bank of Australia lowered its Cash Rate from 1.75% to 1.5% ten days ago the Aussie has strengthened by 3% against sterling and by 1% against the US dollar.  As with the NZ dollar (whose benchmark rate went down from 2.25% to 2% this week), the return is still highly attractive in a world of near-zero and falling yields.  The few Australian economic statistics did not add much to the debate but they didn’t have to: for the moment yield is everything and the antipodeans have it in trumps.

Sterling, meanwhile, continued to fade as a result of last week's rate cut by the Bank of England and an article in The Times that drove home the expectation of near-zero rates by year-end.  The Aussie rose a net quarter of a US cent on the week and added nearly three cents against sterling, touching a three-year high.