AUD 01 (May 08 - Feb 12)

AUD 01 (May 08 - Feb 12)

Postby blid2def » Wed May 07, 2008 7:28 pm

I like Aus$. My ladder rung is coming up for renewal. 6.xx% rate (9 months deposit) in Aug last year, AUS$ has dropped a bit, but still get nett 1.xx% gain. Now rates are like 7.xx% with OCBC, and I'm thinking of continuing my ladder, renewing this to 1 year. Then my ladder will be neatly in place.

Any advice on AUS$ interest rates and strength going forward?
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Re: Australian $

Postby HengHeng » Wed May 07, 2008 9:04 pm

Going forward i think Aussie might not be my choice of currency to enter into.

1. Worries for trade balances : high aussie meaning high cost of exports <-- thus probably central banks would come in

2. Demand in commodities dropping

3. Hyperinflation seems contained.

4. Strenghtening of USD thus weakening of Aussie. ( our currency is more or less pegged to USD i say more or less but the correlations getting lesser)

5. Personally i think anything with time horizon before year end is good. RBA might cut rates towards end of the year. I guess one. See how it goes.
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Re: Australian $

Postby blid2def » Wed May 07, 2008 9:13 pm

Ah thanks, HH, I'll weigh things up and decide what to do... kamsia :)
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Re: Australian $

Postby HengHeng » Fri May 16, 2008 8:32 am

The Australian dollar advanced for a second day against the U.S. currency as rising stock markets and signs the worst of the credit-market turmoil may be over encouraged investors to buy higher-yielding assets.

The currency climbed for a third day versus the yen as investors entered so-called carry trades with funding from Japan after the Standard & Poor's 500 Index gained to a four-month high. Australia's dollar also rose as prices of metals the nation exports increased and as the Australian newspaper said Chinese interests had approached an Australian investment fund to buy a joint stake in BHP Billiton Ltd.

``Improved investor risk-appetite supported the Australian dollar,'' said John Kyriakopoulos, a currency strategist at National Australia Bank Ltd. in Sydney.

The Australian dollar traded at 94.02 U.S. cents as of 8:40 a.m. in Sydney compared with 93.57 in late Asian trading yesterday. It gained 0.4 percent to 98.54 yen.

Australia's dollar is a favorite for carry trades because the nation's interest rate is at a 12-year high of 7.25 percent, comparing with 0.5 percent in Japan and 2 percent in the U.S.

In carry trades, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between them. The risk is that currency moves erase those profits.

The Chinese would take 4.5 percent of Melbourne-based BHP with another 4.5 percent split between the Australian investment fund and a private equity investor, the Australian said.

Blackstone Group LP Chief Executive Officer Stephen Schwarzman said yesterday financial markets are showing ``signs of recovery.'' The S&P 500 added 1.1 percent.
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Re: Australian $

Postby blid2def » Fri May 16, 2008 12:24 pm

I ended up taking a chance and renewing. :lol: Next rung of ladder comes up for revision in 3 months' time; will revisit again then.
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Re: Australian Dollar

Postby winston » Mon May 19, 2008 10:39 am

Australian Dollar Rises to 24-Year High; N.Z. Dollar Declines
By Lilian Karunungan and Chris Young

May 19 (Bloomberg) -- The Australian dollar rose to a 24- year high against the U.S. currency as prices of raw materials the nation exports rallied, including gold. New Zealand's dollar fell on concern the central bank will cut interest rates.

Australia's currency, known as the Aussie, extended its gain this year to 8.6 percent as demand for the nation's higher- yielding assets increased after a U.S. report on May 16 showed consumer confidence slumped. Exports of raw materials account for 17 percent of Australia's economy. New Zealand's currency slid as traders are betting the nation's central bank will be the world's most aggressive in cutting borrowing costs.

``The Australian dollar looks good now and it looks more likely we can break new highs and go on to parity'' with the U.S. dollar, said Tony Morriss, a currency strategist at Australia & New Zealand Banking Group Ltd. ``With a weak U.S. dollar and higher commodities, the Aussie will outperform.''

Australia's dollar rose as high as 95.71 U.S. cents, the most since March 1984, before trading at 95.32 cents as of 12:14 p.m. in Sydney, from 95.56 late in New York on May 16. The currency may climb to 96.50 this week, approaching the 1984 high of 96.53, Sydney-based Morriss said.

New Zealand's currency fell to 77.16 U.S. cents compared with 77.41 cents late last week. Australia's currency traded at NZ1.2371 from NZ$1.2349 on May 16.

The Australian dollar climbed 1.6 percent on May 16 as the UBS Bloomberg Constant Maturity Commodity Index rose 1 percent, near a record-high. Gold, Australia's third-most valuable export, gained 1.6 percent to $899.90 an ounce last week.

Overseas Sellers

New Zealand's dollar has depreciated 6 percent since reaching 82.13 U.S. cents on March 14, the highest since it was allowed to trade freely in 1985.

BlackRock Inc., which oversees $1.4 trillion, and DWS Investment GmbH, part of Germany's largest bank, said they sold the New Zealand dollar as home sales slumped to a 16-year low in April and employment fell the most since 1989. Citigroup Inc., the fourth-biggest foreign-exchange trader, said the so-called kiwi will get ``roasted'' after a 3 percent drop in the past two months. Lehman Brothers Holdings Inc., the fourth-largest U.S. securities firm, forecasts a 17 percent decline by year-end.

``The New Zealand economy looks to be in pretty dire shape,'' said Stephen Miller, a money manager in the Sydney office of New York-based BlackRock. ``The central bank might cut, and cut aggressively. The New Zealand dollar looks vulnerable.''

`Pretty Dire'

The Reserve Bank of New Zealand will lower its 8.25 percent cash rate by about 119 basis points in the next 12 months, according to a Credit Suisse Group index based on interest-rate swaps. A similar index shows the Reserve Bank of Australia will keep its benchmark interest rates at 7.25 percent.

``The Aussie dollar does have a lot of support,'' said Tobias Davis, senior currency dealer at Custom House Global Foreign Exchange in Sydney. ``We have risk appetite growing. We have strong commodity prices. We have the RBA seeming to be reasonably still hawkish on inflation and interest rates.''

Futures traders decreased bets the Australian dollar will gain against the U.S. currency, figures from the Washington- based Commodity Futures Trading Commission show.

The difference in the number of wagers by hedge funds and other large speculators on an advance in the Aussie compared with those betting on a drop -- so-called net longs -- was 57,454 on May 13, from net longs of 65,421 a week earlier.

``The market isn't overly long the Australian dollar so from a technical perspective it looks like we'll see more upward momentum,'' said Morriss.

Australian and New Zealand government bonds were little changed. The yield on Australia's 5 1/4 percent note held at 6.32 percent, according to data compiled by Bloomberg. The equivalent New Zealand bond yielded 6.35 percent.
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Re: Australian Dollar

Postby winston » Thu May 22, 2008 1:38 pm

Australian Dollar to Equal U.S. Dollar, RBC, Westpac Forecast
By Jake Lee and Ron Harui

May 22 (Bloomberg) -- The Australian dollar will climb to equal value with the U.S. currency for the first time since 1982 this year as the central bank raises interest rates, RBC Capital Markets and Westpac Banking Corp. said.

The currency, known as the Aussie, rose to a 25-year high today as the Reserve Bank of Australia this week said policy makers spent ``considerable time'' discussing a rate increase on May 6. It has risen 10.5 percent in six months, the best- performer among major currencies, as the price of its commodity exports, including coal and iron ore, surged to records.

``There could be some parity parties going on,'' said Sue Trinh, a currency strategist as RBC in Sydney. ``The likelihood is that the RBA will raise rates, and they've given a green light for the market to push the currency higher.''

RBC today raised its Australian dollar forecasts to $1.02 by the end of the third quarter, from a previous prediction of 91 U.S. cents. The currency reached to 96.54 cents, the highest since February 1983. It traded at 96.30 U.S. cents as of 3:09 p.m. in Sydney from 96.35 cents in late Asia yesterday.

RBC's has the most-bullish prediction in a Bloomberg News surveys with most banks predicting the Aussie will decline. The Australian dollar will end the third quarter at 91 cents, according to the median forecasts of 36 strategists surveyed.

The price of gold, Australia's third-most valuable export, gained for a sixth day to the highest in more than a month. The nation's terms-of-trade, a measure of export income, is forecast by the central bank to increase 20 percent this year.

`Push Through Parity'

``We expect the Aussie to push through parity this year,'' said Robert Rennie, chief currency strategist at Westpac, Australia's fourth-biggest lender, in Sydney. ``If you create any fair value model for the Australian dollar which has a commodity price input into it, you'd be valuing the Aussie higher.''

Australia's dollar may strengthen beyond parity to $1.01 by the end of this year, Rennie forecast. The last time the Australian dollar closed above $1 was on July 28, 1982, when Malcolm Fraser was the nation's prime minister and the country was in a recession.

The RBA has increased interest rates twice this year to a 12-year high of 7.25 percent to cool inflation running at the fastest pace in 17 years.
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Re: Australian Dollar

Postby HengHeng » Thu May 22, 2008 4:12 pm

When parrots on t.v and everyone is echoing parity ... time to reverse trades.

Beh ki liaoz so jiu loh lor...
Beh Ki Jiu Lou , Beh lou Jiu Ki lor < Newton's law of gravity , but what don't might not come back

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Re: Australian Dollar

Postby winston » Wed May 28, 2008 9:21 pm

My wife is still sitting on her Australian Dollars ( 9 years ? ).

Australian Dollar to Rise to $1.04 Year-End, ANZ Says
By Ron Harui

May 28 (Bloomberg) -- The Australian dollar will rise 8 percent to $1.04 by year-end as the nation's central bank increases the benchmark interest rate twice more in 2008, according to Australia & New Zealand Banking Group Ltd.

The forecast revision makes Australia's third-biggest lender the most bullish on the currency among the 39 banks and research firms surveyed by Bloomberg News. The Melbourne-based bank had previously predicted Australia's dollar, known as the Aussie, would buy 90 U.S. cents by the end of December.

ANZ is betting investors will be lured to the country's higher-yielding assets as the Reserve Bank of Australia pushes the benchmark rate up to 7.75 percent, the highest since 1992, to cool the fastest inflation in 17 years. ANZ's interest-rate forecast, released at the same time as their call on the currency, is also the highest among banks surveyed by Bloomberg.

``The rise of the Australian dollar's yield advantage against the U.S. dollar will prove a compelling story,'' wrote ANZ strategists, led by Amy Auster, Melbourne-based head of foreign exchange and international economics research, in a research note dated yesterday. The Aussie will become one of the highest-yielding currencies among nations in the Organization for Economic Cooperation and Development, they said.

The Australian dollar traded at 95.98 U.S. cents at 9:25 a.m. in London from 96.16 cents late in Asia yesterday. It reached 96.54 cents on May 22, the strongest since February 1983. The $1.04 level would be the Aussie's highest since June 1982.

The Aussie has risen 9.7 percent this year, the second- fastest gainer among the 16 most-traded currencies, as the Reserve Bank has increased the benchmark rate twice to 7.25 percent. That compares with 2 percent in the U.S. and 0.5 percent in Japan. The OECD is made up of 30 developed countries committed to democracy and the market economy, including the U.S., U.K., France, Germany and Japan.

`Will Outperform'

``We also anticipate that the Australian dollar will outperform against most other major currencies in the coming six to 12 months,'' the ANZ strategists wrote. ``The basis for this view is simple; Australia is the only OECD country where interest rates are on their way up.''

ANZ expects the Aussie will rise to 108.16 yen and NZ$1.39 by year-end, compared with earlier predictions of 91.80 yen and NZ$1.30, respectively. The bank forecasts the local dollar will gain to 0.6710 against the euro and 0.5390 versus the British pound, compared with previous estimates of 0.6120 and 0.4690.

Traders expect the RBA to raise its 7.25 percent rate by about a quarter-percentage point in the next 12 months, according to a Credit Suisse Group index based on interest-rate swaps. A similar index shows investors expect OECD member New Zealand to cut its 8.25 percent benchmark rate by about 1 percentage point in the next 12 months.

Commodity Support

Australia's currency will also be bolstered by prospects the prices of the commodities the nation exports will remain ``strong,'' wrote ANZ.

Prime Minister Kevin Rudd said in Canberra today the Australian dollar's surge against the U.S. currency is being driven by the country's commodity boom. The Reserve Bank forecast the terms-of-trade, a measure of export income, to increase 20 percent this year, in its May 9 quarterly statement.

``We expect a continued boost to domestic growth from the terms of trade,'' said Tony Morriss, a currency strategist in Sydney at ANZ, confirming the research note. ``That's pretty positive for the Aussie.''

The price of gold, Australia's third-most valuable export, has risen 7.6 percent
and the UBS Bloomberg Constant Maturity Commodity Index of 26 items has gained 22 percent this year. Exports of raw materials contribute about 17 percent to the nation's economy.

Australia's dollar will weaken to 88 cents by year-end, according to the median estimate of the 39 strategists surveyed by Bloomberg.
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Re: Australian Dollar

Postby kennynah » Thu May 29, 2008 2:13 am

my layman's take on kangeroo dollar..

they r resources export oriented... when global inflation conyinue to pressure comms prices upwards... kangeroos may decide to cheapen their dollar to compete.... at the same time, it creates growth... n since everywhere is experiencing inflation...,better to get growth out of this whole episode...
aussie dollar to weaken progressively
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