AUD 02 (Feb 12 - Dec 20)

Re: AUD 02 (Feb 12 - Dec 18)

Postby winston » Mon Aug 06, 2018 3:55 pm

Here Are Three Reasons to Short Australia's Dollar

By Ruth Carson and Michael G Wilson

Trade war, iron ore, dovish RBA are all reasons to be bearish
Leveraged funds have biggest short position in over two years

Source: Bloomberg

https://www.bloomberg.com/news/articles ... yptr=yahoo
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Re: AUD 02 (Feb 12 - Dec 18)

Postby winston » Wed Aug 22, 2018 11:47 am

Why the A$ is likely to fall further

by Shane Oliver

The Australian dollar tends to move in line with relative price differentials over the long term.

In the short to medium term, swings in the $A are largely driven by swings in the prices of Australia's key commodity exports and the terms of trade (when they go up the $A tends to rise and often been significant divergences.

While US growth is running well above potential and has largely used up spare capacity, Australian growth has been running below potential and there is plenty of spare capacity.

The Fed is on track to hike rates again next month as the US economy has continued to strengthen highlighted by a very tight jobs market. This will take the Fed Funds rate to a range of 2- 2.25%.

If the RBA leaves rates on hold at 1.5%, as is almost certain, then the gap between Australian and US official interest rates will fall to -0.5-0.75%, from a whopping +4.5% in 2011.

In the very short term the Australian dollar is oversold and this along with speculative short positions warns of a bounce higher. However, beyond this our assessment is that the $A has further to fall and will likely reach $US0.70 by year end.

Finally, continuing weakness in the $A will be positive for Australian sectors that compete internationally like tourism, higher education, manufacturing, agriculture and mining.


Source: Property Observer

https://www.propertyobserver.com.au/for ... -245603813
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Re: AUD 02 (Feb 12 - Dec 18)

Postby winston » Thu Sep 20, 2018 8:00 am

Australian dollar could jump in all-out trade war, RBA study finds

SYDNEY: Australia’s real exchange rate could jump 6 percent and gross domestic product be cut by 2.5 percent in the event of an all-out global trade war, Reserve Bank research conducted in March showed.

The study, released Wednesday under a Freedom of Information Act request, ran three scenarios.

Under the worst-case, the U.S. has applied a 20 percent tariff on all goods imports from all countries, including Australia, and all countries except Australia had retaliated with a 20 percent fee on all U.S. goods imports.

It found Australia could be less exposed under this scenario than other economies that rely more on global trade flows for demand and have larger manufacturing industries. As a result, it said, the Australian dollar could appreciate and the downside risks would be greater.

“When we allow the exchange rate to respond to the imposition of tariffs in the Scenario 3, it suggests that the real exchange rate would appreciate by 6 percent,” according to an analysis dated March 21.

“GDP would then fall by an additional 2.5 percent. A lower cash rate could largely offset these effects in the long run.”

On key protagonist China, the analysis finds that net exports have contributed little to its GDP growth in recent years and that exports from the world’s second-largest economy have declined as a share of nominal GDP.

“Nonetheless, rough calculations based on the U.S. trade share and the ratio of exports to GDP suggest that if Chinese export volumes to the US fell by ¼- ½, that would subtract 1-2ppts from Chinese GDP growth, which is not insignificant,” it said.

Source: Bloomberg

https://www.thestar.com.my/business/bus ... omt3gpd.99
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Re: AUD 02 (Feb 12 - Dec 18)

Postby winston » Thu Sep 20, 2018 3:23 pm

The Australian dollar could also come under renewed pressure

Often regarded by currency market participants as a proxy play on China, due to the close economic ties between the two countries, the Australian dollar could be doubly vulnerable in the face of rising US dollar funding costs, given that Australia might find it harder to attract capital inflows to fund its current account deficit.

Even a trade agreement between China and the US might have a downside for Australia.

“While a US-China trade deal would be positive for the Australian dollar, as it would avert a trade war, there is a risk that this deal could lead to the US eating into Australia’s exports to China,” French bank Credit Agricole wrote on Friday.

Source: SCMP
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Re: AUD 02 (Feb 12 - Dec 18)

Postby winston » Sun Nov 18, 2018 5:32 pm

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Aussie Rebound Has Bulls Believing That Currency Has Bottomed

by David Finnerty

Buoyed by signs of easing China-U.S. trade tensions, improving terms of trade and a robust employment outlook, the Aussie has put the brakes on a 2018 slide that reached 10 percent in October.

Sean Callow, a senior currency strategist at Westpac Banking Corp sees the currency pair trading around 0.72 come 2019, buoyed in part by stimulus efforts out of China, Australia’s largest trading partner.

Beijing “appears to have encouraged infrastructure spending to help offset the growth hit from U.S. tariffs.


Source: Bloomberg

https://finance.yahoo.com/news/aussie-r ... 01455.html
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Re: AUD 02 (Feb 12 - Dec 18)

Postby winston » Thu Jun 20, 2019 1:40 pm

BlackRock Is Shorting the Australian Dollar

by Ruth Carson

(Bloomberg) -- BlackRock Inc. is shorting the Australian dollar on a bet the central bank will cut interest rates to as low as 0.5% to revive the struggling economy.

The Aussie will extend recent declines and probably fall as low as 65 U.S. cents next year, said Craig Vardy, head of fixed income for Australia in Sydney at BlackRock, which oversees $6.52 trillion.

The Aussie fell to 68.32 cents Tuesday, the weakest since the so-called currency flash crash on Jan. 3, before trading at 68.75 cents on Wednesday. The last time it was below 65 cents was in March 2009.


Source: Bloomberg

https://finance.yahoo.com/news/blackroc ... 00110.html
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Re: AUD 02 (Feb 12 - Dec 19)

Postby winston » Wed Jun 03, 2020 7:27 am

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Australian dollar surges on iron ore and economic optimism, even as recession loom

By Gareth Hutchens

Iron ore prices have been on a tear recently.

Iron ore is Australia's main export — it accounted for over 16 per cent of exports in 2018-19 — so when iron ore prices surge, the demand for Australian dollars often increases strongly.

The Reserve Board left interest rates at 0.25 per cent, as expected.

While that is a record low for Australia, it's relatively high for the developed world. Britain's central bank benchmark is at 0.1 per cent, the US Fed is targeting a range of 0-0.25 per cent, and key interest rates remain below zero in the EU and Japan.


Source: ABC

https://www.abc.net.au/news/2020-06-02/ ... m/12312542
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Re: AUD 02 (Feb 12 - Dec 19)

Postby winston » Wed Jun 03, 2020 8:03 am

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US70¢ in sight as Aussie dollar hits four-month high

By Lucy Battersby

"Overall, despite pausing for breath in Asia, the rotation out of US Dollars is set to continue,'' Senior Market Analyst, Asia Pacific, for OANDA, Jeffrey Halley said. He now expects the Aussie dollar to get up to US69.3¢.

On Tuesday, the Australian Bureau of Statistics revealed $8.4 billion current account surplus in the first three months of the year. It was the fourth successive surplus. This was due to higher prices for Australian exports and a sharp drop in imports.


Source: The Age

https://www.theage.com.au/business/mark ... .html?btis
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Re: AUD 02 (Feb 12 - Dec 20)

Postby winston » Mon Jul 27, 2020 2:05 pm

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Australian Dollar Faces Rising Obstacles to Sustain Its Rally

by David Finnerty

“With one eye on the currency, it is possible that Lowe will use the RBA meeting on August 4 to sound more dovish”.

Australia’s second-quarter consumer price inflation data is forecast to have fallen 0.5% year-over-year, well below the central bank’s target range of 2%-3%.

New restrictions in Victoria and New South Wales, in response to the surge in coronavirus cases, threatens to further douse inflation, with estimates of a 0.75% reduction in national real GDP growth this quarter.




Source: Bloomberg

https://finance.yahoo.com/news/australi ... 00876.html
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