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  • » Aussie dollar to drop below 66c - "benign" collapse ahead

#251 2016-06-03 09:53:55

tolly_67
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Registered: 2010-05-17
Posts: 1,737
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Re: Aussie dollar to drop below 66c - "benign" collapse ahead

minor news compared to what is coming down the pipe for Europe.
expect a very short term drop before it resumes its upwards climb.
3 days is a long time in finance.

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#252 2016-06-03 09:57:04

tolly_67
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Registered: 2010-05-17
Posts: 1,737
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Re: Aussie dollar to drop below 66c - "benign" collapse ahead

A good time to cream a little more from the doomsayers waiting for the crash in the U.S. dollar. "Look, we were right, it's crashing....lets short it like there's no tomorrow.."   
As those little Whammies would say...." I wanna take a photo of you losing your money..."

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#253 2016-06-18 05:35:21

JulieW
Silver Stacker
From: Australia
Registered: 2010-10-14
Posts: 11,079

Re: Aussie dollar to drop below 66c - "benign" collapse ahead

Interesting perspective:


Money & Markets

CHART: Here's another reason why the Australian dollar just won't fall

Eco-growth-1.jpg


The Australian dollar was briefly back above 74 cents yesterday after the Fed left rates on hold and gave traders a signal that the likelihood of a rate hike in 2016 is receding.

That saw the US dollar weaken across the board which lifted the Aussie higher.

It's down overnight. But at 0.7360 it remains much stronger than most forecasters expected and the RBA hoped.

Like any exchange rate, the Aussie dollar is not a one-factor model. Despite RBA governor Glenn Stevens' often-cited desire for the Fed to hike, so the Aussie will fall, the Aussie's day-to-day machinations are not just about the US dollar.

Rather, the Aussie is an amalgam of moves in the US dollar, RBA interest rates, interest rate differentials more broadly, commodity prices, investor risk appetite, the AAA rating and the actions of speculators.

But underlying all of these factors is the reality that the level of growth in Australia influences all of the above drivers.

That background makes this chart, which was presented at the Capital Economics conference in Sydney, an important and compelling reason why the Australian dollar has been and remains relatively strong.

Australia, the black line, is way out in front in terms of cumulative GDP growth since the GFC kicked off. And while the discussions about the collapse of the mining investment boom might make this seem somewhat historic, the latest GDP release for Q1 2016 shows that this growth outperformance continues.

That, and the continued strength in the NAB's measure of business conditions and Westpac's consumer sentiment survey, is what makes the RBA a reluctant cutter from here unless inflation collapses.

Traders know that and it's a strong recommendation for the Aussie dollar to continue to outperform bearish expectations of its demise toward 60 cents any time soon.

http://www.businessinsider.com.au/chart … all-2016-6

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#254 2016-06-18 05:53:14

phrenzy
Silver Stacker
From: Adelaide
Registered: 2014-10-18
Posts: 2,584
Trades :   101 

Re: Aussie dollar to drop below 66c - "benign" collapse ahead

The australian guy Darryl something,  the australian repeat guest chart analyst on CNBCs street signs Asia thinks that resistance for the aussie is all the way up at. 78 cents even though the long term move is down.

The RBA is in a hell of a bind, rates go down to get the aussie under .70 for exports and the acknowledged housing bubble goes white hot. Raise rates and housing pops and the dollar goes up killing whatever exports we have left.

A few famous australian economists would say then you need inflationary policy that doesn't impact interest rates...HELICOPTER MONEY FOR EVERYONE!!! I'm gonna buy PMs but still you get the dollar down and you can slow down the housing prices by keeping rates on a slow slow upward trajectory.

Australia has form on helicopter money, it didn't do a crappy job and everyone got new TV's. Hard to pretend that it wasn't 22 year old FIFO miners thinking the good times would never end buying home theater systems and a spare dirt bike for when company comes around didn't save Australian consumer spending numbers during the GFC, but that $900 helped and who doesn't want some money printing for us instead of for big banks?


R.I.P Khaled Al Assad. One man who few will remember, he died defending humanities legacy.
"Hundreds would die, but not the thing they died for. 'A man can stand up..."

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#255 2016-06-18 05:58:51

SpacePete
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Registered: 2014-03-01
Posts: 13,437
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Re: Aussie dollar to drop below 66c - "benign" collapse ahead

JulieW wrote:

Interesting perspective:

Here's the flip side of predictions:

Australian dollar could drop to 40 US cents if we don't stop our 'lavish' spending

Australian dollar could drop to 40 US cents if we don't stop our 'lavish' spending


Vimal Gor has a scary predication for the Australian dollar.

THE Australian dollar could drop as low as 40 US cents, relegating our economy to the status of an emerging market, a top fund manager has warned.

Vimal Gor, the head of income and fixed interest at BT Investment Management, says a shock hit to the currency will be around the corner if we don't stop living it up pre-GFC style, and learn to spend within our means.

The "unique combination" of increased reliance on foreign capital and fast falling interest rates meant the Australian dollar was at "far more risk than most people think", Mr Gor said.

"This reliance on outside capital to fund our lavish lifestyle, which is still stuck in 2006, puts us in a very different situation to pretty much every country that is currently running a zero or negative interest rate policy.

"Economic growth in Australian dollars has been so weak for a number of years, even as real economic growth continues to show some pretty encouraging headline numbers ... Yet we keep sending this growth overseas through high imports and paying out on past borrowings.

"This trend has deteriorated in the last year meaning we have to borrow from and sell assets to the rest of the world at a new, faster pace."

He said that while the mining boom was in full force "everyone wanted to be Australia's best friend", but since the glory days had come to an end in 2014, the nation was more like "the little weedy kid no one wants on their team".

After years of rampant borrowing "against the windfall of rising commodity prices, essentially acting as if they would last forever", the big banks' balance sheets more than doubled from 2003 to 2008, with much of the foreign cash going "straight into house prices".

"The income windfall from rising commodity prices was spent as quickly as we earned it," he said.

Mr Gor, a bearish commentator who correctly predicted last month's Reserve Bank interest rate cut, said a dramatic drop in the Australian dollar was "highly likely" given the weakness in the latest GDP numbers.

"A shock downside could easily see it move to 40c against the US Dollar if current trends continue, commodities fall to lows again and economic growth deteriorates," he said.

http://www.news.com.au/finance/superann … b3cf6f89b8


Catus amat piscem, sed non vult tingere plantas

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#256 2016-06-18 06:14:22

SilverDJ
Member
From: Australia
Registered: 2014-11-01
Posts: 2,522

Re: Aussie dollar to drop below 66c - "benign" collapse ahead

phrenzy wrote:

The RBA is in a hell of a bind, rates go down to get the aussie under .70 for exports and the acknowledged housing bubble goes white hot. Raise rates and housing pops and the dollar goes up killing whatever exports we have left.

Rubbish.
Wasn't a problem when the dollar was on parity or over a for a few years.
I say raise the damn rates and let the dollar go back up.

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#257 2016-06-18 06:19:13

phrenzy
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From: Adelaide
Registered: 2014-10-18
Posts: 2,584
Trades :   101 

Re: Aussie dollar to drop below 66c - "benign" collapse ahead

SilverDJ wrote:
phrenzy wrote:

The RBA is in a hell of a bind, rates go down to get the aussie under .70 for exports and the acknowledged housing bubble goes white hot. Raise rates and housing pops and the dollar goes up killing whatever exports we have left.

Rubbish.
Wasn't a problem when the dollar was on parity or over a for a few years.
I say raise the damn rates and let the dollar go back up.


It isn't a problem when iron ore prices are 300% higher, it's not a problem when European competitors are much much cheaper, vina as well and it's only Japan that's more expensive.

I'm all for higher aud, I gotta buy greenbacks, but stable and a little lower is what SMEs want. I know for my little project lower aussie is very very helpful when things actualy start happening.


R.I.P Khaled Al Assad. One man who few will remember, he died defending humanities legacy.
"Hundreds would die, but not the thing they died for. 'A man can stand up..."

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#258 2016-06-23 17:37:17

SpacePete
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Registered: 2014-03-01
Posts: 13,437
Trades :   122 
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Re: Aussie dollar to drop below 66c - "benign" collapse ahead

The AUD surged through 76c!

Tmfgaa3.jpg


Catus amat piscem, sed non vult tingere plantas

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#259 2016-06-23 17:55:08

SilverDJ
Member
From: Australia
Registered: 2014-11-01
Posts: 2,522

Re: Aussie dollar to drop below 66c - "benign" collapse ahead

SilverPete wrote:

The AUD surged through 76c!

GO you little beauty!

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#260 2016-06-23 19:11:25

BuggedOut
Member
From: New South Wales
Registered: 2015-07-21
Posts: 1,770
Trades :   36 

Re: Aussie dollar to drop below 66c - "benign" collapse ahead

The currency wars are really heating up aren't they?

At this rate we're going to need to cut rates here in the next month or so or we'll hit 80c

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#261 2016-06-24 00:25:25

Skyrocket
Silver Stacker
From: Melbourne
Registered: 2014-07-20
Posts: 4,840
Trades :   36 

Re: Aussie dollar to drop below 66c - "benign" collapse ahead

USD is going to go down BIG time. Our dollar will be worth lots more. I been saying that for over a year now. I have just started a thread bet on it here -

http://forums.silverstackers.com/messag … ml#p927673

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#262 2016-07-08 20:51:21

aleks
Silver Stacker
From: Karl-Marx-Allee
Registered: 2010-10-14
Posts: 2,392
Trades :   27 

Re: Aussie dollar to drop below 66c - "benign" collapse ahead

I would not want to be shorting AUD at the moment it looks like it really does not want to go down, I wouldn't be surprised if it heads back to the highs of april at 78 cents


Only you have your best financial interest at heart, be your own guru

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#263 2016-07-12 04:22:05

BuggedOut
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From: New South Wales
Registered: 2015-07-21
Posts: 1,770
Trades :   36 

Re: Aussie dollar to drop below 66c - "benign" collapse ahead

Over 76 cents again and markets appear to expect a 0.25 point cut from the RBA in 20 days (over 50% chance)

Wonder if the market is pricing in a cut?

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#264 2016-07-12 04:27:24

SpacePete
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Registered: 2014-03-01
Posts: 13,437
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Re: Aussie dollar to drop below 66c - "benign" collapse ahead

BuggedOut wrote:

Over 76 cents again and markets appear to expect a 0.25 point cut from the RBA in 20 days (over 50% chance)

Wonder if the market is pricing in a cut?

Yeah, the RBA will not like this level of AUD strength!


Catus amat piscem, sed non vult tingere plantas

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#265 2016-07-12 06:40:13

SilverDJ
Member
From: Australia
Registered: 2014-11-01
Posts: 2,522

Re: Aussie dollar to drop below 66c - "benign" collapse ahead

I'm still waiting for this "benign collapse" roll

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#266 2016-07-12 06:43:37

SpacePete
Silver Stacker
Registered: 2014-03-01
Posts: 13,437
Trades :   122 
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Re: Aussie dollar to drop below 66c - "benign" collapse ahead

SilverDJ wrote:

I'm still waiting for this "benign collapse" roll

It did drop below 69c at one point, but then the rest of the world started collapsing faster than Australia.


Catus amat piscem, sed non vult tingere plantas

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