AUD/USD not giving up on that 1.0500 barrier just yet…

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Just edged back from a recent days high of 1.0492, but have a feeling  the grind may continue higher with EUR/AUD heading back to wards o/n lows around 1.2458.

Another story in Reuters this morning highlights the  recent IMF data  showing  rapid growth in global reserves over the last 10yrs  but the USD share falling back to around 62% as others have risen 10 times to around $310 bln. AUD and CAD stand out  as 20 reserve managers  , particularly Russian and  Swiss, have  been active buyers  of both  as they have been  notable out performers through the global financial crisis, with analysts and fund managers  reflecting as well on their sound banking systems .

(Asian , M/E and European Central banks have been steadily reducing their holdings of USD and JPY in preference for the AUD and CAD)

The IMF is planning to list both currencies as reserve currencies alongside  the USD, YEN , GBP, Euro and CHF

AUD’s currently around 1.0482 with the EUR/AUD at 1.2470

 

6 Comments

  1. What exactly does it mean when the IMF lists a currency as a reserve currency? It becomes acceptable as collateral for IMF loans, or something else? Or is it just a badge of honour, like being knighted by the Queen?

  2. Pandu, i think it’s more an official recognition especially as reserve managers have been readjusting their portfolios in favour of those 2 over the big 5

  3. Pete, thanks for the reply. So, no practical effect of the IMF plans? As in for example, when a company becomes a component of the DJIA, some index following funds et al are forced to rebalance their portfolios and add the new company, sell the one that dropped off. Is there no such effect in the forex market?

  4. dear Pete

    what does “option expire ” means? what do happen when these numbers expire? I mean

    many thx in advance

  5. Hi Pele please see my reply to Annie just now

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