AUD/USD

[greggles]

AUD getting hammered today on the back of Middle East tensions and mixed economic data from China. China's 1Q GDP was higher than expected but industrial production and retail sales failed to meet market expectations.

With risk aversion being a focus of traders and investors right now I can see the AUD negativity increasing in the short term and it would not surprise me to see it revisit October 2023 lows before the EOFY.

 

[eskys]

The US may come up with another Plaza Accord, wrapped up as gifts. Someone might buy into it, and that will help our dollar too?

 

[greggles]

The US may come up with another Plaza Accord, wrapped up as gifts. Someone might buy into it, and that will help our dollar too?

Well, there are advantages to a lower AUD, but I think they are more than offset by the disadvantages. I think the USD will start to falter eventually due to the amount of debt they are getting themselves into. A trillion dollars every 100 days at the moment. But this will not help the AUD as the strength of the AUD is largely dependent on base metal prices and while things are looking a little better in that area, I don't think there's going to be a significant turnaround in any metal prices this year aside from precious metals.

The prospect of lower interest rates is also a problem as it looks like the US interest rates will remain higher for longer while we are set to cut them here. It all looks very bearish for the AUD for the remainder of 2024 at least.

 

[eskys]

Well, there are advantages to a lower AUD, but I think they are more than offset by the disadvantages. I think the USD will start to falter eventually due to the amount of debt they are getting themselves into. A trillion dollars every 100 days at the moment. But this will not help the AUD as the strength of the AUD is largely dependent on base metal prices and while things are looking a little better in that area, I don't think there's going to be a significant turnaround in any metal prices this year aside from precious metals.

The prospect of lower interest rates is also a problem as it looks like the US interest rates will remain higher for longer while we are set to cut them here. It all looks very bearish for the AUD for the remainder of 2024 at least.

I was thinking along these lines:

Their high dollar won't help them so they'll look for ways and means to bring their dollar down. In doing so, our dollar will go up ( it won't help with export of our commodities, but should help gold) So in my mind, unless the US bring their dollar down, they'll be in a fix. Am I thinking straight, greggles?

 

[BossMan.]

Surely going long on the AUDUSD pair is a potential play at the moment, my thoughts;

1. Australia is the only major nation that could still raise rates (currently priced in at a 30% chance)
2. Fed is set to cut before Australia (almost guaranteed)
3. Continued demand for critical minerals

How can the Australian dollar lose, especially once the Fed starts cutting, with Australia's sticky inflation situation? Interested in other peoples thoughts on the long jeopardy of the AUD

 

[Chipp]

Surely going long on the AUDUSD pair is a potential play at the moment, my thoughts;

1. Australia is the only major nation that could still raise rates (currently priced in at a 30% chance)
2. Fed is set to cut before Australia (almost guaranteed)
3. Continued demand for critical minerals

How can the Australian dollar lose, especially once the Fed starts cutting, with Australia's sticky inflation situation? Interested in other peoples thoughts on the long jeopardy of the AUD

Mark the next ASX CPI data in your Calendar , if that comes in hot almost 100% AUD gets a 7 in front . ATM i consider any AUDUSD dip a conviction buy

 

[Garpal Gumnut]

The AUD continues to rise against the USD, it has gone from $AUD/USD 0.630 to 0.675 since October 2023.

I have a fair few material stocks in my SMSF. My guess is the big guys will have some hedging in place so lets hope they make the right calls. Gold is being held back for those buying, investing or trading the metal in AUD which I guess would be most Gold bugs on ASF.

The correlations between interest rates, inflation and other fundamentals, and the AUD/USD give me a headache so I'll not harbour a guess as to where it might go from here.

gg

 

[mullokintyre]

I have been using the WISE card to convert AUD to USD on the way up.
They are 3% better in rate conversion than one of the Oz banks.
When the poo hist the rotating air mover, histpry has shown the AUD crashes.
I expect that to happen again, so that is my reasoning behind hoarding USD.
Plus my wife is going on a cruise to Antarctica via Argentina at the end of the year,
She will need lots of American pesos.
Mick

 

[mullokintyre]

If any of you are in agreement that the US is heading for a recession (I am leaning towards it at the moment, but only just), then a look at the historical movements of the AUD/USD pair in past recessions will show that the AUD gets hammered with the strange "flight o quality" meme that permeates US markets.
Hope any recession is still a bit further away, as I want to buy USD on the way up
Mick

I posted this in January.
I believe we are seeing this flight to quality now.
We have had two down days, and I suspect more to follow.
What went down? Nasdaq, SP 500, BTC, Gold, Silver,Oil both WTI and Brent, Platinum, palladium, and probably a few others I missed.
What went up?
The USD. Against pretty much every currency.
i have never understood this behaviour in a so called logical market, but that is what happens.
Rather than rail against the lack of logic, just trade what happens.
Mick

 

[mullokintyre]

I posted this in January.
I believe we are seeing this flight to quality now.
We have had two down days, and I suspect more to follow.
What went down? Nasdaq, SP 500, BTC, Gold, Silver,Oil both WTI and Brent, Platinum, palladium, and probably a few others I missed.
What went up?
The USD. Against pretty much every currency.
i have never understood this behaviour in a so called logical market, but that is what happens.
Rather than rail against the lack of logic, just trade what happens.
Mick

AUD now down to .6561 , with probably more falls to come.
It still makes me scratch me head, the US deciding to inflate its way out of debt, or die doing so.
With such depreciation, why do the markets just keep holding them?
The consumers of energy must be laughing.
Mick

 

[mullokintyre]

AUD/USD now down under 64 cents for short time, now recovered to 0.6424.
The USD will continue to appreciate against the AUD if this current market rout continues.
Which I am expecting to happen.
Question is, just how low can it go?
Mick

 

[BossMan.]

Question is, just how low can it go?

I think another major factor is what China does in the next three months, I still think we will see the AUD buying about 0.70usd by the end of the year.

Assuming Chinas economy doesn't weaken any further and Trump doesn't get into office / put in place his proposed tariffs.

Bullock just about ruled out rate cuts for this year, and was far more hawkish in my opinion.

I think the bottom is in at 0.64

 

[mullokintyre]

AUD/USD pair back below 66.
Just when it seems to be making headway, it gets crunched.
Thought when the RBNZ dropped its rates by 25 BPS the other day it might have given the UAD a kick, but seems not to have been noticed.
Mick

 

[BossMan.]

AUD/USD pair back below 66.
Just when it seems to be making headway, it gets crunched.
Thought when the RBNZ dropped its rates by 25 BPS the other day it might have given the UAD a kick, but seems not to have been noticed.
Mick

Weakness in China is a concern, Michelle said they would not be cutting this year, so I definitely still think it is a hold until at least Christmas at this price.

 

[BossMan.]

I imagine like any top figure head she is prideful and wont back down on this unless the market spirals.

Above is from the AFR Bullock is currently speaking.

 

[mullokintyre]

AUD approaching an 18 month high versus USD at 0.6890.
Would be nice to get to that 70 cents mark before Christmas.
I expect it will be all down hill after that.
Mick

 

[DaveTrade]

Looking at a real long-term chart the market is currently at a critical level.

 

[BossMan.]

AUD approaching an 18 month high versus USD at 0.6890.
Would be nice to get to that 70 cents mark before Christmas.
I expect it will be all down hill after that.
Mick

I think the winner of the US election will determine if we hit that 70c mark. Personally see the AUD topping out at .705-710 if trump doesn’t win then a retreat once the RBA starts cutting.