Strong AUD

[oz_mark]

I have a Masters of economics (international trade) and I still don't understand it. OK, so I do, but that doesn't mean I can predict it any better than the next man.

The likelyhood is that the RBA will raise rates prior to the end of the year, according to the press today, and the opposite is likely to happen in the US in the near furture. Parity with the USD is not so far away. S&*T.

I did read a report from one of the research houses ealier this year predicting parity within two years. I will try to dig it up, but I remember there was a lot of talk about the future of the US dollar and how it could easily head south in a big way.

 

[Hvr]

[FONT=&quot]Ok I’ve got absolutely no idea where the $AUS is heading but have just purchased Yen at a rate greater than ¥100 to the $AUS. Hopefully this will last until I finish my trip there. [/FONT][FONT=&quot] [/FONT]

 

[oz_mark]

Dollar surges to 23-year high

Going up and up.....


Dollar surges to 23-year high - Business - Business - smh.com.au

The Australian dollar surged above 90 US cents to reach its highest point in 23 years today before retreating slightly before the local market opened.

The Aussie climbed to 90.06 US cents in overnight trade - its highest level since June 12, 1984 - amid further weakness in the US dollar.

When the Australian foreign exchange market opened formally this morning, the $A was at US89.93.

 

[NM]

well its managing to remain above the 90c mark now. Great if you are buying things in US$ at the moment, but I keep seeing the potential from my US$-based share options retreating in value :evil: .

 

[markis10]

The sub prime crisis is yet to peak in the US with honeymoon periods for most loans yet to change, bottom line is the USD will continue to drop at least until the issue is sorted with the massive number of defaults expected, we are talking at least 6 months!

 

[oz_mark]

Having a look at some cross rates, looks like the CAD is stronger than the USD. I bet that sits well with the merkins

 

[NM]

Having a look at some cross rates, looks like the CAD is stronger than the USD. I bet that sits well with the merkins

And sits even better with the Canucks

 

[bambbbam2]

And sits even better with the Canucks

Don't you mean the Hosers?

 

[NM]

Don't you mean the Hosers?

I had not come across that term before in this context. But google was my friends . I guess they are pretty much interchangeable in this case.

 

[littl_flier]

It had risen through 92c to currently trade at $0.9233 at a 23 year high. Great news for those going overseas.

Bloomberg.com: Worldwide

 

[schomers87]

It had risen through 92c to currently trade at $0.9233 at a 23 year high. Great news for those going overseas.

Bloomberg.com: Worldwide

Soon to be another interest rate rise in Aus = better dollar

 

[littl_flier]

Soon to be another interest rate rise in Aus = better dollar

Parity here we come!!!!!

Interestingly, I heard the government claiming yesterday the strong Aussie dollar was due to the management of the economy but economists are saying the cuase is demand because of our higher interest rates and thus a stronger demand for investment. This seems an ozymoron because Labour is saying they didn't manage the economy well and interest rates are going up, and liberal is claiming their economic management is leading to an increasing dollar.

Looks like they may both be right for once. If what I wrote makes any sense that is.

 

[simongr]

Isnt the strong A$ because of the weakness of the greenback - and thus implicitly greater demand for A$?

 

[oz_mark]

Soon to be another interest rate rise in Aus = better dollar

I would have thought that the expectation of the interest rate rise would have already been reflected in the AUD.

Be interetsing to see what happens if they don't raise interest rates.

 

[PPW]

This seems an ozymoron because Labour is saying they didn't manage the economy well and interest rates are going up, and liberal is claiming their economic management is leading to an increasing dollar.

I think they're all "ozy morons"

 

[straitman]

I think they're all "ozy morons"

More like they're all "ozy morons"

 

[littl_flier]

I think they're all "ozy morons"

You're probably quite right PPW.

I would have thought that the expectation of the interest rate rise would have already been reflected in the AUD.

Be interetsing to see what happens if they don't raise interest rates.

I think you've hit the nail on the head oz_mark. After the release of the CPI rates last week, the market has already anticipated the rise. Most economists are saying that interest rates will have to rise- CPI is in the uncomfortable range for the RBA and consumer spending is also a little high atm.

If the RBA are independent (like they say) then IR will rise. But then again...............

 

[coyote25]

Isnt the strong A$ because of the weakness of the greenback - and thus implicitly greater demand for A$?

It's a combination of the weak US (which is overvalued mostly because of international demand to trade in USD) and the Australian higher interest rates leading to what is called the carry trade (borrowing from country with low interest rate then moving money into high interest rate country and getting the difference - this a risk with currency movements).

Interesting times ahead, at least one major ecomonist is saying parity is possible in next 6 months. A lot depends on US interest rate cuts (currently expected .025 but possible .50 which is not really factored into the current dollar exchange.

 

[drron]

No you are all wrong.I came home and up the dollar goes just as I predicted earlier in this thread.

 

[oz_mark]

No you are all wrong.I came home and up the dollar goes just as I predicted earlier in this thread.

Just wait till I book my next overseas trip. That will fix the dollar good and proper.