Why is AUD so strong?

Discussion in 'Economics' started by midlifeguy, Aug 9, 2006.

  1. This is crazy.

    Their economy is slowing....
  2. Mr B

    Mr B

    expect a Q4 Oz rate hike. AUD is a leading petrocurrency (self explanatory). also, USD weakness generally re euro, yen, GBP. technical uptrend to on the daily chart.
  3. just21


    Western Australia is actually growing faster than China. 10.6% v 10.3%
  4. That, and the huge deposits of uranium, coal, gold and metals.
  5. MTE


    Go West Coast Eagles!:D
  6. The weagles? Im a brissie supporter, so ive about stopped following footy after the 3 IN A ROW GRAND FINAL WINS.

    Did i mention uranium , coal, copper, pine gap, gold, aluminum, safe political climate, and beaches?
  7. Latest strength is partly technical partly fundamental:

    Technical: On the daily chart if you look at the most recent swing high (May11) of .7793 and connect a circular fib to the swing low (June 28) of .7270 you will see that price broke out of the key 1.618 (circular fib) resistance on july 25th. As such the downtrend was halted (and as a matter of fact july 26 was an interest rate rise) - the first in a long time. Flash forward to the monthly charts and there is a HUGE inverted H+S pattern that started in October of 2005 and was finished in July 2006. The .8000 level achieved in both early 2004 and 2005 marks a multi year top and the .618 retrace of that with the 3 year low of .7000 has just been broken. It gets interesting because it looks like we are on the second shoulder of a multi year H+S pattern (and hence due for a major reversal down over the next few years) OR these past few years are a rest from the all time low of .4778 (April 2001) and parity is the long term goal. The monthly chart in the last 12 months resembles the Gold Monthlys so movements in the two are linked. Price is hugging the circular fib on the monthlies quite well so it looks like the .8000 level is achievable by years end.

    Fundamentals: Although the US fed has been steadily raising rates over the past few years - Australia has only just recently started to enter onto that merry go round, and another rate rise is due by years end. Inflation is rising fast as well. Precious metals and commodities continue to rise, the collapse in gold prise has not materialized - and Austrlia is a key producer of the metal. The economy is strong with record earnings being reported by the major banks/companies. The worlds Biggest miner - BHP Billiton (and Australia's largest corporation) continues to do well.
  8. MTE


    I don't follow footy either. :)
  9. employment was ten times higher than expected last night, unemployment rate hit a new cycle low, inflation is running higher than expected, enough said.
  10. Interesting...we have some friends there and they say jobs are low paying.
    #10     Aug 10, 2006