AUD, CAD termed reserve currencies by IMF

< sigh > a depressing way to start the morning.

On the "up side" we'll have cheaper iPods &c for a few more years perhaps.
 
Aussie dollar set to join the big league
Reported by Clancy Yeates

The Australian dollar looks set to be classified as an official reserve currency by the International Monetary Fund, in a sign of the dollar's rising importance on global money markets.

With heavy buying by foreign central banks thought to have supported the Aussie dollar in recent months, the fund is considering whether to add it and the Canadian dollar to its list of official reserve currencies.

Today, only the US dollar, euro, pound, yen and Swiss Franc are classified as official reserve currencies those held in large quantities by foreign governments.

But buried in a statistical report published late last week, the fund said it was considering publishing data on the official reserve holdings of Australian and Canadian dollars because of the growing foreign interest in these currencies.

Both economies have also benefited from resources booms caused by industrialisation in the developing world.

The global head of interest rates strategy at Westpac, Russell Jones, said the IMF's move was recognition of the growing importance of the dollar for global investors.

"Over recent years, the Australian and Canadian economies have proved more stable and their financial sectors more robust than the more traditional safehavens of the US, the eurozone, Japan, the UK and Switzerland," Mr Jones said.

The move was also a "stamp of approval" for how these economies had been managed, and the data would provide more transparency on official holdings of the dollar, he said.

Up to 23 central banks from around the globe have included Australian-dollar assets in their foreign exchange reserves. It's estimated these official holdings of the dollar are worth about $60 billion, but exact figures are not available.

However, Mr Jones also said that reserve currency status also came with risks. For one, it could mean safehaven buying of the dollar, which could distort its value.

"The decision on the part of the international community to hold part of its wealth in a particular currency unit means that a certain amount of control over that currency and over its domestic debt markets is necessarily ceded," Mr Jones said.

As well, he said a reserve currency nation that had an economic "fall from grace" could also suffer a major out-flow of capital, worsening its economic problems.

Other commentators, however, say the IMF's decision is unlikely to have a major impact on the dollar.

Deutsche Bank's foreign exchange strategist, John Horner, said it would not significantly change investors' views.

"It seems a statistical recognition of what is already the reality," Mr Horner said.

"We know that there's been increasing interest in owning Australian dollars by reserve managers this won't affect investment mandates."

Read more: http://www.theage.com.au/business/a...-big-league-20121120-29n9e.html#ixzz2Cj9I5jdz
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LONDON (MarketWatch) The Australian and Canadian dollars, the world's leading commodity-rich currencies, are being formally classified as official reserve assets by the International Monetary Fund, marking the onset of a multi-currency reserve system and a new
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The Australian dollar looks set to be classified as an official reserve currency by the International Monetary Fund, in a sign of the dollar's rising importance on global money markets.
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Asset or currency?

Clancy, Clancy, Clancy. "The big league?" Bwahahahahah. It's not a part of the "Big League" you toolsqueezer, the "Big League" warm chairs on The Fed and at Goldman Sachs. It's a tradeable item, it just happens to smell a bit better than a lot of other tradeable items.

Currently the majority of commodities are priced in USD. None are priced in AUD , unless of course there are trade deals struck my individual governments. I'm with the Deutsche Bank guy, won't make a scrap of difference. The AUD is already being traded heavily for a variety of reasons, therefore it is finding itself making up an increasing proportion of assets held in Reserve Banks, it's listing is merely a reflection of the increase in trading of the AUD during the past couple of years. In much the same way that the BIS plans to make gold a Tier 1 asset, it's just the bureaucrats catching up with the flow.

The damage has already been done, the AUD's performance over the past 18 months has been predictable at best, disturbing on the whole, and without precedent* at worst.

The AUD in my opinion is destined to remain high. We are also destined to have a love affair with small dogs and to lose interest in procreating (*look north on an atlas if you are looking for precedents).
 
Imagine if we couldn't get our AUD to stay down because it was traded too much on world markets...

Like, our manufacturing, farming, and other exports would be totally stuffed!

I hope that doesn't happen :rolleyes:
 
So AUD and CAD are in the basket. Add Yuan inevitably, devalued USD and Euro, supported by a gold base. Any others? Brazillian Real? Peso? Amero?

(and agree with Dogmatix)
 
The reserve assets that the IMF claim as in reserve, unfortunately for them have already been reserved for the Australian people, as per our birthright, to an equal share of the commonwealth of this land, period.

Our government is holding this in trust on and for our behalf. That is why we placed them there for. To protect us from Corporate and other threats like bankers that may wish to raid our accounts.

Since when does the IMF make statements on behalf of We the People of Australia or the Canadians?

Edit: added as below:

Our currency was during the 2008 crisis, one of the more unstable currencies yet the article speaks of our stability.

Remember it devalued from almost on par with the US and dropped down to around 0.63 to the US. Around a 40% drop way down the gurgler in quick time. Thats massive.

Who knows what the IMF are thinking and what there definition of a Reserve currency may be and how this would actually work. Is this based on estimated mineralisation in the ground, as our reserve Bank has only around 80 tonns in reserve that is only but a drop in the sea of debt?

It's the gold in the ground, that is what counts here as one of the worlds major producers of the stuff. Thats why we make the grade here for this purpose alone.
 
I hope the $AUD stays high for a lot longer im not finished investing OS :p: & we get bargain metals prices

I cant understand why people want the dollar to fall .....Have you finished stacking ?
 
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