AUD

[Kauri]

Concerted Rate Cuts, BOE, Fed, BOC, SNB, Sweden. ECB

 

[alphaman]

AUD has been falling spectacularly, at one stage I saw 65c against USD.

I don't trade currencies, so can anyone tell me what's going on?

I realise we've got rate cuts, expectations of falling commodity prices, and maybe US funds are liquidating, but a fall of such speed against the sickest currency seems to indicate something else?

 

[Indie]

I bought a very healthy amount at .83 and sold 60% of my position at .72 exactly two weeks later. Happy to take the profit and happy I still have some in play. I guess the .60-.70 range is the traditional USD/AUD relationship since floating the dollar so I guess in hindsight it's not such a big surprise to see things back there. But the sheer pace of the fall is unbelievable. So much for the commodities super cycle and China's ascendency. USA still drives the world economy.....for now.

 

[Kauri]

I bought a very healthy amount at .83 and sold 60% of my position at .72 exactly two weeks later. .

Well done... I tink???
Cheers
...........Kauri

 

[doctorj]

You've got to wonder when this will all end. Rumour has it a 50bp cut is on the way here, along with a £50b part nationalisation of a swag of banks.

I finally got something right last week - I transferred a bunch of AUD over here. But what is the RBA doing? Are things that bad in Aus that the cut was warranted? Isn't the RBA primarily charged with price stability as against growth?

 

[theasxgorilla]

You've got to wonder when this will all end. Rumour has it a 50bp cut is on the way here, along with a £50b part nationalisation of a swag of banks.

I finally got something right last week - I transferred a bunch of AUD over here. But what is the RBA doing? Are things that bad in Aus that the cut was warranted? Isn't the RBA primarily charged with price stability as against growth?

I don't think the RBA is as stupid as everyone thinks, I think this market response is a drastic over reaction (albeit one which puts money in my pocket...), and I think that the Australian economy is far, far, far better positioned to absorb the impact of this crisis than all the scaremongerers are trying to have everyone believe.

On record, I'm buying AUD at this level...ie. sending money from EUR/SEK to AUD.

AUD at 96 cents to the USD and mortgage rates at 10%....hello people! That's a lot of contractionary financial policy that can be unwound.

The rest of the world might be thinking the same thing a lot of posters here are thinking: that the RBA move is signalling big trouble in little Australia. Wait until the smoke settles. In the meantime sit back and watch the fireworks.

BTW, historically (last 30 years) the AUD has spent very little time below .55 eurocents.

With Europe and the US proping up their finance sectors and Australia with 4 of the 18 AA rated banks in the world...and our exports suddenly becoming a sh1teload cheaper to buy on world markets...remind me again why Europe or US is a better place to have your money???

 

[CanOz]

Thanks G'rilla. I've been trying to tell my self the same thing all day while I've watched the Aussie get hammered.

Cheers,


CanOz

 

[Indie]

AUD has been falling spectacularly, at one stage I saw 65c against USD.

I don't trade currencies, so can anyone tell me what's going on?

I realise we've got rate cuts, expectations of falling commodity prices, and maybe US funds are liquidating, but a fall of such speed against the sickest currency seems to indicate something else?

A 50pt rate cut was always on the cards but the 100pt really drove the dollar down. All the rhetoric points to a further 200pts or so over the next 12-18 months so I think this was a catalyst. Couple this with the demand for USD during the biggest credit squeeze since the great depression and you have the perfect storm for all currencies vs USD. Deflationary scenarios create greater demand for dollars.

The fallacy that the USD would continue to get diluted by the printing press failed to take into account some major factors:

1) All other central banks in the west are printing en mass too.

2) Credit would be destroyed faster than dollars could be printed by the Fed

3) Even if the Fed printed a dollar for even one being destroyed in credit markets, it can't force banks to loan money and more importantly it can't force consumers to borrow anyway.

That's my take on it anyway. We'll need to wait until after deflation to see the USD get truly destroyed. Hyper-inflation is coming, but not yet.

I considered buying USD a pretty straight forward play and went it hard with little hesitation, and I don't normally trade currencies.

True geniuses like Kauri went straight for yen which will probably out-perform all other currencies in near to mid term. Masterminds went into gold went we were near parity with the USD.

 

[alphaman]

Indie I don't get point 3. How does that cause AUD to fall against all other currencies?

 

[noirua]

AUD has been falling spectacularly, at one stage I saw 65c against USD.

I don't trade currencies, so can anyone tell me what's going on?

I realise we've got rate cuts, expectations of falling commodity prices, and maybe US funds are liquidating, but a fall of such speed against the sickest currency seems to indicate something else?

Watching some business TV programmes it appears that the US$ is now one of the safe havens. The Aussie is unfortunate, they say, as the plunge in commodity prices caused a "get me out run on the AUD" and the worse it got the greater the selling. At some point they will see the advantages of the weak AU$ and dive back in again.

 

[CanOz]

Until risk is served up for dinner again, the AUD will take a pummeling....although its hard to see it falling much more to me.

Look at the Yen, 99.08 to the USD, fell like a rock. No appetite for risk at the moment. US Treasuries though......flight to "safety".

Cheers,


CanOz

 

[CanOz]

Nice little consolidation pattern on the AUD this morning. Anyone setup for it? Kauri? I need a Java upgrade so i'll be on the sidelines until i get home tonight.

Cheers,

CanOz

 

[Warren Buffet II]

The fall in the AUD just shows how bad the aussie economy is and how worried investors are about it.

1) High inflation (4% and going up)
2) Economy based on commodities (commodities falling like a rock, even today I read that Chinese customers are starting to delay iron ore shipments because of oversupply)
3) The most expensive housing market in the world, with most of the housing ready **** old stuff and costing thousands.
4) People high debt.

So what is good about the AUD? I know, it had a higher interest rate that the rest of the world, that's it.

WBII

 

[Indie]

Indie I don't get point 3. How does that cause AUD to fall against all other currencies?

Just making a point that Australia was printing dollars and creating credit just as fast as the US and so were most of the European economies. The idea that the US was debasing it's currency faster than everyone else was not entirely true.

Our dollar was being held up by two primary factors: a commodities bubble and an interest rate differential (AU vs US) that was quite wide by recent historical standards. This created a high demand for the currency. What we are seeing now is a return back to the AUD's average against USD since we floated the dollar (i.e .60 - .70 range). Once the Chinese domino falls next year I would expect to see new lows in commodity prices (USD) and this would be negative for AUD. We could easily see sub .60 with more interest rate cuts. But really, who can say? A lot of water under the bridge between now and then.

Interesting to note that if you price the ASX in USD it has collapsed in the range of 65%+ this year, I think ( I was never that good at math). But no worries, Kevin Rudd and Wayne Swann said we are doing better than most other markets in the world.

 

[replicator]

There's strong support at 0.6622 last night. Is Chinese government buying AUD?

 

[theasxgorilla]

Watching some business TV programmes it appears that the US$ is now one of the safe havens. The Aussie is unfortunate, they say, as the plunge in commodity prices caused a "get me out run on the AUD" and the worse it got the greater the selling. At some point they will see the advantages of the weak AU$ and dive back in again.

Hopefully not too soon...I like it at these levels

 

[Kauri]

another lesser spotted prawn pattern... tight stop and will trail aggressively initially..

Cheers
..........Kauri

 

[Kauri]

another lesser spotted prawn pattern... tight stop and will trail aggressively initially..

Cheers
..........Kauri

and stop to just below entry... will give her room to skip from here... I tink.

Cheers
..........Kauri

 

[Kauri]

and stop to just below entry... will give her room to skip from here... I tink.

Cheers
..........Kauri

short... and sweet...
now to see if a mangrove jack pattern appears..

Cheers
...........Kauri

 

[white_goodman]

short... and sweet...
now to see if a mangrove jack pattern appears..

Cheers
...........Kauri

whats a mangrove jack pattern?