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The Australian Dollar is pitched to fall significantly

Discussion in 'Business, Investment and Economics' started by skating101, Apr 20, 2012.

  1. skating101

    skating101

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    Sorry my mistake I meant to say make a case for a higher Australian dollar
     
  2. explod

    explod explod

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    That is a more difficult question. In the short term as things are turning down in employment opportunities, and housing looks over cooked the Aussie may retract some.

    However looking down the track, we are self sufficient in food and energy, coal and gas. The majority of other countries in trouble are not. This will translate into a higher Assie in my view.

    This is of the cuff but others (long term currency traders) will have a much better slant than I.
     
  3. skating101

    skating101

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    That is also my attitude towards the Australian dollar, while there is no particular argument for the US dollar to go higher there certainly is an argument for the Australian dollar to go lower.

    I am considering converting a significant amount of money to US dollars waiting for QE3 then using the US dollars to buy gold.
     
  4. explod

    explod explod

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    As said. I believe QE3 is under way via the financing by the Fed of Euro bank problems.

    The US dollar is at an interesting juncture on the chart:

    http://www.traderslog.com/quotes-charts/?sym=DX!&gclid=CID0tIWCoqYCFUaApAodpHmHng

    We have a flag formation in the final stages and for me I'd be hesitant till I could see which way it breaks. As it is now reporting season in the US continued bad news, as some expect, could see it go the wrong way.
     
  5. skating101

    skating101

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    Remember the US is one of the only country where when the economic environment turns down the value of their currency increase (risk aversion) just check the strength of the US dollar during the height of the GFC
     
  6. ishakeel

    ishakeel

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    This is really bad news - especially for people travelling overseas..
     
  7. Superb Parrot

    Superb Parrot

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    ABC reporting this morning that 80% of US companies beating analysts expectations.
    On the other hand, our Dollar is used by others as a proxy for China's wealth.
     
  8. rcm617

    rcm617

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    It's actually great news for our export industries, tourism and any industry competing against foreign imports. Also great news for Australian companies earning most of their income overseas like CSL, COH, SRX, BXB, AMC, QBE etc.
     
  9. Glen48

    Glen48 Money can't buy Poverty

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    The world knows we are on China's coat tails so as they move up or down will influence the AUD, keep and eye on Spain once they tank I reckon a run to USD.
     
  10. Tyler Durden

    Tyler Durden

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    Curious as to why that is?
     
  11. Glen48

    Glen48 Money can't buy Poverty

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    Here you go:
    from Uncommon Wisdom.


    The disaster in Europe should be pushing the U.S. dollar up more than it is. But it’s not, and that has me deeply worried ...

    Worried that the next leg of the dollar’s decline may be right around the corner ... worried that the loss of the dollar’s reserve-currency status could occur more quickly than even I had expected ... and worried that the “X&@!” may soon hit the fan, across the entire globe.

    Don’t get me wrong. The dollar may indeed soon rally a tad more. Which is what I expected for this part of the year, as Europe’s sovereign-debt crisis continues nearly unabated.

    But the pathetic action in the dollar so far is very telling. Since the first of the year ...

    The dollar has lost 1.6% against the Aussie dollar, and 5.5% against the New Zealand dollar.

    In the non-euro countries of Europe, the dollar has lost 1.3% against the Swedish krona ... 3.2% against Norway’s krone ... 1.9% against the Swiss franc ... 6.4% against Hungary’s forint ... and a whopping 7.2% against Poland’s zloty.

    Against the Russian ruble, the greenback has shed a whopping 7.9%!

    In South America, the dollar is not faring well, either. It’s lost 5.5% against Mexico’s peso and an amazing 8.6% against Columbia’s peso.

    And in Asia, the dollar has lost 3.3% against India’s rupee ... 3.8% against Malaysia’s ringgit ... 3.7% against the Singapore dollar ... 2.9% against the Philippine peso ... and 2.5% against Taiwan’s dollar.

    All told, against the euro ”” despite the European Central Bank’s (ECB) massive money-printing ”” the dollar has LOST 0.9% of its value!

    Moreover, consider this: Measured by the widely monitored U.S. Dollar Index ”” the greenback is a mere 10.7% above its all-time record low of 70.7 made in March 2008.

    Imagine that. It’s as if the Dow Industrials ”” whose March 2009 bear market closing low was 7,033.62 ”” were to have never bounced higher than 7,786 since then.

    I repeat: At a time when the dollar should be staging a decent (although temporary) rally due to Europe’s MASSIVE economic and sovereign debt problems ...

    The U.S. dollar’s performance is utterly terrible.

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    So Why Is the Dollar Performing so Miserably?

    There are two chief reasons ...

    FIRST, savvy investors are anticipating another round of MASSIVE FED MONEY-PRINTING.

    So am I. Odds are that it’s probably coming our way a lot sooner than even I expect.

    For one thing, no matter how much money the ECB prints for Europe, it’s going to need help from Ben Bernanke and our Fed. Perhaps the Fed will print money and lend it to the ECB. Perhaps there will be currency swaps, where the Fed prints money and swaps it for euros with the ECB.

    No matter what, Europe’s problem is not just the ECB’s. You can rest assured that as Spain and Italy start to buckle ”” which they are now doing ”” the Fed will be in there, helping out the ECB.

    This means, of course, that both the euro and the dollar are going to suffer together.

    Moreover, signs are coming to light that the U.S. economic recovery over the past few years has been nothing but smoke and mirrors.

    Stocks are starting to wobble ... real estate prices are on the verge of falling again ... and the public isn’t buying the headline unemployment figures any more. The 8.2% official unemployment number is hogwash. The true unemployment figure is over 35% ”” and increasingly more and more people and investors realize it.

    Plus, it’s an election year. And no way, no how is the Fed going to let the economy or the markets completely fall apart this year. Bernanke will print money at the drop of a hat.

    More important as far as I’m concerned is ...

    SECOND, the very disturbing trend I’ve seen over the last month. It seems that my forecast that Washington and Beijing are in cahoots with each other to further devalue the U.S. dollar is coming to pass.

    In just the past month, Beijing has taken one step after another to boost the value of its yuan and to internationalize it ”” all at the expense of the dollar ”” without so much as a peep out of Washington.

    Beijing has ...

    Allowed JPMorgan to promote and make a market in yuan-based money-market funds in Hong Kong. To the best of my knowledge, the first foreign investment bank allowed to do so.

    Beijing has also ...

    DOUBLED the amount of regulated foreign investment bank money allowed in mainland China.

    While the Bank of China is now working with authorities in London to make that city a major Western trading hub for the yuan.

    And most important of all ...

    Just this past week, for the first time ever, China’s bank regulators gave the country’s commercial banks its blessings in allowing them to sell short U.S. dollars.

    That’s huge. And yet, hardly anyone in the West is talking about it.

    I am, because in my book, it confirms one of my recent warnings ”” that a major dollar devaluation is in the cards ”” and that both Washington and Beijing are in on it.

    Conclusion: While there’s still a chance the dollar may stage a temporary rally, the end days for the dollar (and the euro) are not far off.

    Your action statement: Be prepared at any time to move into the best dollar-hedge-type investments under the sun ...

    * Inverse ETFs on the U.S. dollar that profit when the dollar loses value, such as the PowerShares DB US Dollar Index Bullish Fund (UUP).

    * Solid Asian-based income funds that offer good yields and the potential for currency appreciation as Asian currencies climb against the greenback.

    And of course ...

    * A solid diversified natural resource portfolio. The best hedges against a declining dollar, tangible assets.

    Especially gold. Which although not yet ready to break out again, that day appears to be coming ever closer.
     
  12. Tyler Durden

    Tyler Durden

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    But didn't the US refuse to lend any money to the IMF just very recently?
     
  13. fatmango

    fatmango

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    The AUD will fall slightly as the interest rates cut kick in. Measured against the UK pound, the Euro and the $US however our easing will not be significant. The English economy is dependant upon the Europeans and the Euro is gong nowhere for at least two years. The US wants to keep the $US relatively low to the euro and Asian currencies as they try to export their way out of trouble, therefore we, by proxy or not, remain relatively strong......unless the Chinese economy and the Shangai index tanks. Anyone wishing to bet on that?
     
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