AUD becomes a reserve currency next week.

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Freckle
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June 18, 2013 - 12:58 pm
$A to join IMF exchange holdings database
Updated | The Australian dollar will from next week be included in an influential global database of central bank foreign exchange holdings, potentially supporting its status as an emerging reserve currency.
This will be interesting. It's certainly been bouncing around a bit lately. The volatility is a concern. Will it settle into a range between 90 – 95?
TheFinanceShop
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June 18, 2013 - 10:19 pm
I think its more a question of when it will settle in the early 90's.
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Freckle
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June 19, 2013 - 4:01 am
The FED is the most significant force affecting the AUD at this stage. Certainly more so than economic fundamentals. Bond markets are jittery and interest rates are up and that's just with the FED talking about tapering. I think any attempt by the FED to reduce QE will see rates rise which would stop dead what little anemic growth exists in the US economy. My guess is that 3-4Q13 will see downward pressure on the US$.
With the FED trapped in a QE conundrum for the time being I cant really see the USD strengthening against the AUD. I tend to think 95 will be the pivot point for a while. How the AUD does against other currencies is another story.
JT7
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June 19, 2013 - 4:43 am
Interesting….
Can the Fed stop the QE without the US economy sinking back into deeper recession….?
As you mentioned Freckle any stop to the QE would cause a dramatic retraction. The US economy just appears addicted to the massive flow of printed paper money without which it gets sick just like a junkie needing a hit of heroin.
Is it all an illusion…
How long will it all last….and is the Fed being truthful or is it just prolonging the inevitable……….
Gold, silver…..
Headache!
Jack
Freckle
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June 19, 2013 - 6:24 am
JT7 wrote:
Is it all an illusion…
You might find this presentation from Bass interesting.
Kyle Bass: "The Next 18 Months Will Redefine Economic Orthodoxy For The West" (3May2013)
I share his opinions especially when it comes to reality and the BS that are markets today.
JT7
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June 19, 2013 - 9:19 am
Thanks for the link Freckle….
Yep the numbers are crazy mate and holds similar views to a lot of others out there. I agree mate the markets are BS….. the manipulation is staggering
Freckle
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June 20, 2013 - 10:12 am
China's in trouble now.Overnight repo rate at 25% insane and their bond market is in trouble. AUD could take a hit if they don't get it sorted quick smart. I get the distinct impression the wheels are very close to falling off this baby.
JT7
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June 20, 2013 - 9:03 pm
Freckle wrote:
China's in trouble now.Overnight repo rate at 25% insane and their bond market is in trouble. AUD could take a hit if they don't get it sorted quick smart. I get the distinct impression the wheels are very close to falling off this baby.
LOL where's my shovel and silver bullion…..