Russ: I Think the AUD is Getting Very Close Now.
The set-up has been brewing, with the comedown vis a vis commodities, while you have divergent macro developments like the 100% paydown of all the Debt the Howard govt inherited from the previous govt. Plus, you've also got the myriad agricultural and mining boards (quasi-state agencies) that have been trickling out their forecasts for fiscal 2007, and the growth of commodity sales looks good (these tend to be conservative forecasts). Finally, you've got a rebound in forecasts for monetary policy, suggesting the RBA will start hiking again later this year. Oh, and let's throw in the fact that many Australian resource companies are probably acquisition targets, excepting the giants RioTinto, and BHP.
(BTW, I had no idea the AUD had become the 4th most traded currency.)
My call would be the AUD is going to ramp pretty hard, soon. The first ramp will be sold. I tend to view .7400 as the oscillator level. The Sentiment tends to get accellerated above that level, with bullishness ramping above there, and bearishness ramping below there. One wonders the first ramp challenges the high .74's, then gets sold back down to .7400.
BTW, I don;t trade the currency. But, I've been watching it now for almost 10 years, and I do buy and sell longer term investments partly based on the AUD rhythms.
Best,
Gregor |
