Aussie dollar to drop below 66c - "benign" collapse ahead
- Thread starter SpacePete
- Start date
Down goes the AUD again. But any weakening in the US will again strengthen the AUD and we'll be doing this all over again at some future RBA decision time. For countries like Australia that are stifling economic growth and attacking the core of innovation, there's not much else that can be done than to keep weakening the currency, hold your balls and hope for the best. Not a great plan.
Interesting thanks SilverPete. I've been pondering for a while that the "currency crash" is a "US Dollar-centric" construct, and all the doom and gloom is to do with the US dollar and its associated issues. Coupled with this is the see-saw effect of USD down - gold/AUD up, giving us a quite orderly rise and fall in gold and the associated stability.
This is not a prognostication but it's good to see a reasonable voice in the 'we're all gonna die' debate.
This is not a prognostication but it's good to see a reasonable voice in the 'we're all gonna die' debate.
A good time to cream a little more from the doomsayers waiting for the crash in the U.S. dollar. "Look, we were right, it's crashing....lets short it like there's no tomorrow.."
As those little Whammies would say...." I wanna take a photo of you losing your money..."
As those little Whammies would say...." I wanna take a photo of you losing your money..."
Interesting perspective:
Money & Markets
CHART: Here's another reason why the Australian dollar just won't fall
The Australian dollar was briefly back above 74 cents yesterday after the Fed left rates on hold and gave traders a signal that the likelihood of a rate hike in 2016 is receding.
That saw the US dollar weaken across the board which lifted the Aussie higher.
It's down overnight. But at 0.7360 it remains much stronger than most forecasters expected and the RBA hoped.
Like any exchange rate, the Aussie dollar is not a one-factor model. Despite RBA governor Glenn Stevens' often-cited desire for the Fed to hike, so the Aussie will fall, the Aussie's day-to-day machinations are not just about the US dollar.
Rather, the Aussie is an amalgam of moves in the US dollar, RBA interest rates, interest rate differentials more broadly, commodity prices, investor risk appetite, the AAA rating and the actions of speculators.
But underlying all of these factors is the reality that the level of growth in Australia influences all of the above drivers.
That background makes this chart, which was presented at the Capital Economics conference in Sydney, an important and compelling reason why the Australian dollar has been and remains relatively strong.
Australia, the black line, is way out in front in terms of cumulative GDP growth since the GFC kicked off. And while the discussions about the collapse of the mining investment boom might make this seem somewhat historic, the latest GDP release for Q1 2016 shows that this growth outperformance continues.
That, and the continued strength in the NAB's measure of business conditions and Westpac's consumer sentiment survey, is what makes the RBA a reluctant cutter from here unless inflation collapses.
Traders know that and it's a strong recommendation for the Aussie dollar to continue to outperform bearish expectations of its demise toward 60 cents any time soon.
http://www.businessinsider.com.au/c...y-the-australian-dollar-just-wont-fall-2016-6
The australian guy Darryl something, the australian repeat guest chart analyst on CNBCs street signs Asia thinks that resistance for the aussie is all the way up at. 78 cents even though the long term move is down.
The RBA is in a hell of a bind, rates go down to get the aussie under .70 for exports and the acknowledged housing bubble goes white hot. Raise rates and housing pops and the dollar goes up killing whatever exports we have left.
A few famous australian economists would say then you need inflationary policy that doesn't impact interest rates...HELICOPTER MONEY FOR EVERYONE!!! I'm gonna buy PMs but still you get the dollar down and you can slow down the housing prices by keeping rates on a slow slow upward trajectory.
Australia has form on helicopter money, it didn't do a crappy job and everyone got new TV's. Hard to pretend that it wasn't 22 year old FIFO miners thinking the good times would never end buying home theater systems and a spare dirt bike for when company comes around didn't save Australian consumer spending numbers during the GFC, but that $900 helped and who doesn't want some money printing for us instead of for big banks?
The RBA is in a hell of a bind, rates go down to get the aussie under .70 for exports and the acknowledged housing bubble goes white hot. Raise rates and housing pops and the dollar goes up killing whatever exports we have left.
A few famous australian economists would say then you need inflationary policy that doesn't impact interest rates...HELICOPTER MONEY FOR EVERYONE!!! I'm gonna buy PMs but still you get the dollar down and you can slow down the housing prices by keeping rates on a slow slow upward trajectory.
Australia has form on helicopter money, it didn't do a crappy job and everyone got new TV's. Hard to pretend that it wasn't 22 year old FIFO miners thinking the good times would never end buying home theater systems and a spare dirt bike for when company comes around didn't save Australian consumer spending numbers during the GFC, but that $900 helped and who doesn't want some money printing for us instead of for big banks?
SilverDJ said:
It isn't a problem when iron ore prices are 300% higher, it's not a problem when European competitors are much much cheaper, vina as well and it's only Japan that's more expensive.
I'm all for higher aud, I gotta buy greenbacks, but stable and a little lower is what SMEs want. I know for my little project lower aussie is very very helpful when things actualy start happening.
