A sinking Australian dollar could drive petrol prices higher and rekindle domestic inflationary pressures, putting Reserve Bank interest rate relief potentially further out of reach.
Coming off a 9 per cent annual decline in 2024, the worst in six years, the Australian dollar traded around US62¢ on Sunday after the Chinese yuan dropped sharply against the greenback earlier last week. The Australian currency is regarded as a proxy for China’s growth and tends to fluctuate with China’s fortunes.
Source: https://www.afr.com/markets/equity-markets/weak-a-drives-up-petrol-prices-fanning-fears-of-inflation-20250103-p5l1x3