AN FRANCISCO (MarketWatch) The Australian dollar dropped sharply on Tuesday to trade further below parity against the U.S. currency, with little relief in sight as investors shun risky assets. In afternoon U.S. trading, the Australian dollar AUDUSD -0.32% sank more than 1% to 98.02 U.S. cents. So far in May, the Aussie has shed 5.9% against the greenback, according to FactSet Research. The Aussie's reversal of fortune in recent weeks was magnified when its 50-day moving average fell below the 200-day moving average on Friday to form a "death cross," often seen as an indication of a weak trend. ............. The same factors are expected to continue weighing on the Australian dollar as the currency solidifies its status as a poster child for risky assets. "The Australian dollar/U.S. dollar has taken over as the global risk barometer as well as the global growth barometer," said Brad Bechtel, head of sales at Faros Trading LLC, who sees the pair sliding to 95 U.S. cents before support emerges. As fears about a hard landing of the Chinese economy simmer and Europe stumbles from one crisis to another, the Australian dollar is likely to remain in retreat, spurred on by expectations of further interest rate cuts from the Reserve Bank of Australia. http://www.marketwatch.com/story/australian-dollar-drops-1-vs-greenback-2012-05-22 -------------------------------------------- My comment. As AUD dollars falls,our gold becomes more valuable(compared to gold in USD)
Did the AUD fall or did the USD rise? All this relative value BS drives me nuts. How long is a piece of rope when measured with a piece of elastic? Then imagine measuring a piece of elastic with another piece of slightly different elastic. Then imagine heating one piece and cooling the other whilst measuring, and why not randomly wet one of them too. That's your answer.
I know how you feel. In Australia,I can keep my money in the bank or buy gold. If the AUD value falls against gold ,and I think it will , later on I can swap the gold for more dollars than I would otherwise of had. This is very good and all I need to know. While the AUD fell so did gold,this month. So gained and lost nothing. But there's good reason to believe the AUD will continue to fall against the USD ,perhaps considerably, And that gold will rise against the USD.A double wammy that will put a big smile on my face.
Funny that AUD and gold fell when measured against the USD... One might even suggest that the USD appreciated against everything? Personally when I look at currency fluctuations (not in a micro forex trading kind of way though) I look at the USD, the AUD, the NZD, the CAD, the Euro and gold to see what really happened. Alternatively, you could listen to Commsec or some bank spruiker to hear the random excuse of the day. "The AUD fell because of Euro fears" "The AUD rallied on Euro stability" "The USD has become toilet paper because I have mad skiddies in my underpants"
One might! Having said that, recently the USD has appreciated more in relation to the AUD than it has Gold, and it seems possible that this trend might continue for a bit just yet... Time to get some more popcorn stacked in the pantry I think!
^ This is true aswell. It's tricky for anyone to figure out really. Is gold going down, or is it the AUD, or is it the USD appreciating... what's going on! Personally I think gold was sold down bigtime in preparation for a coming QE3'ish announcement in June. I listened to this podcast today and it spoke of such things, and the election, Jan 1 Fiscal Cliff, etc: http://www.financialsense.com/finan...major-macro-events-in-june-more-qe-on-the-way Now to a quote from previous Fed Chairman Paul Volcker: "That day the U.S. announced that the dollar would be devalued by 10 percent. By switching the yen to a floating exchange rate, the Japanese currency appreciated, and a sufficient realignment in exchange rates was realized. Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake." That quote doesn't necessarily prove anything, but if the Fed has learned something from their past actions, then it makes sense. Keep in mind that I believe Volcker is currently employed by the Fed or the Treasury, I can't recall.
Generally it was a fall in the Aussie dollar AND gold. The biggest winners so far seem to be our Kanuk cousins. The Looney is worth more than the Aussie (albeit by about 0.03c). Their dollar has only lost about 2c since the beginning of this latest crisis. Lucky bastards. I guess it's because they have greater exposure to the US market for their exports.
Or, it could be that the market fundamentals are broken and nothing makes sense. I truly believe that most of the stuff the MSM comes up with is vague guesswork. They're still trying to figure out what caused the financial crisis... "Gee, urh, wassnit dem housin crash n stuff in 'Merica?"
No, I think it's our exposure to China and the recent interest rate drop that hit our currency harder than those Yankee wannabes in the north of the continent. Sorry, Canadians.
The MSM think that the financial crisis is over. They keep referring to it as the 2008 financial crisis.
