How will dollar react if Labor win?
- Thread starter damianb87
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explod
explod
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Probably won't make a scrap of differrence. Our economy is but a grain of sand compared to the rest of the world's financial markets. There is however a fair bit of would trading of Aussie currency due to its rise and probably with China diverting away from US dollars and having increasing interest in our resources as well as the Mandarin speaking Rudd it probably will be positive.
I'd hang in there old son.
If you believe the doom sayers a Labour victory will bring higher interest rates, therefore a higher aussie dollar, in reality rates will go up regardless who wins. The US dollar is headed south IMO.
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I'm not sure at what the level the carry trade is as yet, whilst it is starting to unwind ..... somewhat, which is not actually good news for the AUD, as it has been at the long end of the trades. I keep hearing about unwinding, but it looks more like relocation of funds, caused by others considerations.
There are positive factors supporting the AUD, mainly ores and the yield looming into a 2.5% gap against the USD, but out of the positives, whilst the mining boom has been a positive it has added to inflationary forces at domestic levels where demand is as high as it is in export markets.
Now the perception of traders to a labor government, I would be looking directly at the Yen for the semphores, as the news thickens with regards to sub-prime troubles, it could see further pauses in the upward movement in the AUD, such as we have seen since the news started to leak out and every rally has been muted out by it. I think we may have a slow grind up with many pauses , compliments of the Yen.
Just think this over, the Kiwi and the Aussie have been the worst performers for two months, right in the middle of a credit crisis, US Fed rate cuts and the semi official unwinding of the carry trade.
Add to that, we have the third highest rate for western countries only Iceland and New Zealand are ahead of us!
This brings out the argument that the carry trade will regroup, because the Reserve Bank are undoubtedly in a monetary tightening process aimed at its domestic market
, that will bring the carry traders out like flies, because hell will freeze over, before the BoJ gets the nod to implement a practical rate regime and start rising rates.
There are positive factors supporting the AUD, mainly ores and the yield looming into a 2.5% gap against the USD, but out of the positives, whilst the mining boom has been a positive it has added to inflationary forces at domestic levels where demand is as high as it is in export markets.
Now the perception of traders to a labor government, I would be looking directly at the Yen for the semphores, as the news thickens with regards to sub-prime troubles, it could see further pauses in the upward movement in the AUD, such as we have seen since the news started to leak out and every rally has been muted out by it. I think we may have a slow grind up with many pauses , compliments of the Yen.
Just think this over, the Kiwi and the Aussie have been the worst performers for two months, right in the middle of a credit crisis, US Fed rate cuts and the semi official unwinding of the carry trade.
Add to that, we have the third highest rate for western countries only Iceland and New Zealand are ahead of us!
This brings out the argument that the carry trade will regroup, because the Reserve Bank are undoubtedly in a monetary tightening process aimed at its domestic market
, that will bring the carry traders out like flies, because hell will freeze over, before the BoJ gets the nod to implement a practical rate regime and start rising rates.
