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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (3873)	5/26/1998 5:38:00 AM
From: Moominoid	Read Replies (1) \| Respond to of 9980

How is Australia being impacted, David? Noticed that last week the Aussie Dollar made a new 12-year low against the USD. So far the impacts are varied. World commodity prices have fallen and impacted Aussie resource companies. About 50% of our exports are still resource/agriculture goods though much less of our economy is in these sectors. Tourism has begun to fall significantly. The education sector hasn't yet seen the full impact yet as students sign up for at least a year. The economy was going well at this point so it has been in a good position to receive the impact. The government created a huge budget surplus. Unemployment is still slowly falling (now just under 8%) But Japan is our number 1 trade partner and Korea number 2. So far the dollar fell from 80 US cents to 62 something and the Reserve Bank (RBA) has begun to defend the currency each time it goes under 63c. If this gets worse then they may need to eventually raise interest rates. Then the crunch will really come. Recently bought a few shares in FAX, an Australian CE. Good move or not? Love to hear your reasoning on what you expect for the Aussie dollar and Aussie bonds. What's a CE? I think the RBA will try to defend the currency at 62-63c even if this means raising interest rates. Aussie stocks are not overvalued with a few exceptions such as News Corporation, Coca-Cola Amatil and now some of the big resource players like BHP and WMC. A US stock crash should therefore have a slightly weaker echo here. Also there will probably be a federal election later this year. Labor stands to do well on its anti-reform platform. The Liberal-National Coalition is planning major tax reform and privatization. David