In this climate, this is very good news. Sure, imports have dropped and tough days are still ahead but quite a few countries would be willing to trade places today. Reuters:
Australia’s economy expanded last quarter as the best trade performance in 48 years helped offset a slump in business and housing investment, putting it among the very few developed nations to have avoided a recession.
The Australian dollar hit eight-month highs as the economy’s resilience was seen lessening the need for further easing from the Reserve Bank of Australia (RBA).
“We’ve dodged the recession bullet for the time being,” said Michael Blythe, chief economist at Commonwealth Bank. “It’s stronger than the RBA was expecting, and it reinforces the ‘on-hold for the time being’ message.”
Speaking of the dollar, the US greenback has been kicked hard lately. After strengthening for a while it’s falling back against many currencies. Some suggest that the US dollar is suffering from the massive intervention by the government (the bailouts and rescue plan) though the US is not the only industrialized country with significant debt issues. When the economy turns this is likely to go away but in the near term the dollar looks soft.