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Stronger Australian Dollar?

Discussion in 'Forex and Cryptocurrencies' started by blinkau, Feb 22, 2007.

  1. blinkau

    blinkau

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    Hi Guys, I am doing abit of course work at the moment and have got myself stumped on a question. They ask what economic factors in the coming months could send the AU dollar above 80c. I am thinking oil and interest rates? Does that sound correct?

    I've hit a bit of a brick wall at the moment and any help would be great :banghead:
     
  2. Kauri

    Kauri E/W Learner

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    Lifted this from here... hope it helps... :)
    http://www.actionforex.com/forex_analysis_and_forecasts/long_term_forecasts/outlook_for_2007_2007010115301/

    AUD
    The AUD is likely to be well underpinned by RBA rate hike expectations, with at least one more hike due in 2007, although in the absence of additional rises most of the positives may already be in the price. The main upside risk for the AUD will come from any flows that are triggered by the existing high level of interest rates, especially when compared to what will be a fairly miserable looking JPY. However, the AUD will need to show signs of breaking above the 0.80-0.82 area to create additional upside momentum and while this is certainly a risk, it is not part of our core scenario. The commodity story is likely to remain intact through the period and should remain a supporting factor for the AUD.
     
  3. scsl

    scsl

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    Following on from Kauri's post, the differential between the US and Australian overnight cash rate (5.25% and 6.25% respectively) is also a factor that is currently seeing the AUD head towards 80. With no interest rate changes expected in the US or Australia this year, the AUD is likely to strengthen further against the US dollar, because of the higher interest rate here in Australia.
     
  4. Smurf1976

    Smurf1976

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    The RBA made a statement recently to the effect that rates were more likely to rise than to fall. So the trend in interest rates remains up for the moment at least. :2twocents
     
  5. Naif

    Naif

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    hi scsl
    well i think australia should increase the interest rates at least once this year because australia economy is growing and so there is fears from the inflation..
    i am sorry, i disagree with you that the aud is likely to have more strength in the future against us while australia is expected not to raise the intrest rates. if australia didnt want to raise the interest rate that mean they need a weaker aud.

    you should also watch the gold.. i think the gold is going to 700 and you know australia is one the big exporters of gold in the world.

    australia should raise the intrest rate and we should see 8000 soon...

    good luck :)
     
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