The Reserve Bank's "on hold" decision is as much about waiting and seeing what happens in Europe and the US as it is about Australia. In the normal course of events, an underlying inflation rate of 2 percent (the officialy inflation rate is just 1.2 percent) would see a central bank clambering for the rate cut lever.

But this time around the Reserve Bank is waiting to see what its cumulative 1.25 percent rate cut since last November will do to Australia. It notes the firming business credit numbers (the best in several years) and the slight improvements in home valuations (a sign that buyers are prepared to pay a premium to get set, perhaps because of lower interest rates).

The bigger concern is the Australian dollar which has scaled four-month highs around 106 US cents as this rate decision was made. That is partly the prospect of no rate change in the coming couple of months, combined with persistant buying of Aussie bonds by Governments seeking one of the few remaining AAA rated sovereign states.

But the high dollar has a consequence for Australia. As manufacturers and those who compete with imports battle to survive, the unemployment rate is likely to keep rising. There has been good research showing rising jobless in the retail sector and the plight of manufacturing is well established. The Reserve Bank has the power to intervene by selling the Aussie dollar in an effort to defend the jobs and manufacturers.

However such action might only tempt international bankers, and more importantly hedge funds, to take on our central bank in a winner takes all game of poker over the true value of the Aussie dollar. Though the Reserve Bank has been willing to tinker at the edges of such policy in the past, whether it is prepared for an all-out war I am very doubtful.

That being the case, while Europe is shaky and the US is showing negligible growth, the Aussie dollar has potentially more to grow. But that makes imports cheap and takes the edge off fuel prices - which in turn eases back the inflation signals. In other words, rising unemployment but persistantly low prices could be the formula that sees interest rates lower again by year's end.

If you're in business - or are a home owner - it won't last forever. It might not even last for long. So take advantage of this historically peculiar set of economic circumstances.