Article in the Sydney Morning Herald
9 Responses to “AUD strength reduces the need for interest rate rises”
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Exclusive: Contact with senior aide believed to be one of a number between Libyan officials and west amid signs regime may be looking for exit strategy
http://www.guardian.co.uk/world/2011/mar/31/gaddaf-envoy-britain-secret-talks-exit-strategy
Ya but the article also said “the impact of the higher dollar would not be enough to counter the need for rate rises.”
Expert eyeing 1.08 aud/usd, 1.12 in 2012
http://www.smh.com.au/business/markets/dollar-dazzles-again-as-expert-eyes-us108-20110401-1cnt6.html
AUD strength is killing everything but mining, well, eventually will take its toll on that too. house prices are falling even in the cities i just read in fin review. gr8 for tourism too! i really want to short this and feel good about making money from doing it. not good for anyone to have it run up because carry traders want to justify it going up forever because they like the carry.
so, question is, what no. is the top…. last time corrected to 100WK moving average in 4 wks. too aroung 80c. so id say, TP at that again.
Garth agreed but the elusive safe yield. Amazing climb given soft consumer bubble housing retail poor despite cheapest imports ever but mining breeds wealth and feeds most sectors; believe many retirees are v wealthy much equity in homes etc so until repats I’m notseriously shorting A/Y. Aussie is hurting all exporters including Mining just with record prices its softens treasury hedge but the banks are laughing so record profits to report – seems to be self perpetuating momentum unfortunately atm. JR is to advise timing on any s/s so I don’t get burnt (again!)
Read an article on bloomberg where riggers in AUS are making some230kusd/yr. Here in the US the same job would pay around 60kusd. How can the mines even make money? I mean AUS isn’t the only country with minerals. I wonder if it’s just activity funded by hot money/speculation/interest rate differential flows? God, it looks like 2008 all over again.
The AUD price trend clearly tells us that Australia is nothing but a commodities basket. The rest of the economy has minuscule impact. Its time the politicos admitted this and adjusted policy accordingly, instead of trying to imagine Australia as a manufacturing economy or a knowledge economy or a tourism economy. With commodities already in a raging bull run which is tipped to get even stronger (see effect of US crop report yesterday), the AUD will keep going up.
Roman: Australia does enjoy a dominant position in many minerals. Australian companies managed to raise prices by >50% last year even with heavyweight buyers like China Inc, india Inc and Japan being the counter-parties. In the midst of a financial crisis! That shows how much pricing power the miners have, and why they can afford to spend so much to dig up the stuff.
Stern Hu anyone ?