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To: Enigma who wrote (16488)	8/24/1998 5:16:00 PM
From: goldsnow	Respond to of 116762

Needless to say sold their Gold for dollars... Friendless Aussie dollar destined for record lows 01:03 a.m. Aug 24, 1998 Eastern By Wayne Cole SYDNEY, Aug 24 (Reuters) - The Australian dollar crumpled to 12 year lows on Monday as fresh turmoil in emerging markets spilled over into the developed world and threatened to put a further brake on global growth. Crises in Russia and Latin America mixed with recessions in Asia and Japan to make an incendiary brew which drove funds to safer climes like the U.S. dollar. The A$, with its exposure to both emerging markets and commodities, was especially vulnerable. ''The A$ is becoming a barometer for all emerging markets, not just Asia,'' said Michael Blythe, senior economist at Commonwealth Bank. ''We think the dollar's well and truly below fair value, but fundamentals mean little while world sentiment is so poor,'' he said. Commonwealth Bank's forecast was for the currency to find a floor at 57 U.S. cents, but the risks were clearly on the downside in this climate. ''I suspect 55 cents is the floor most people have in mind, and it can't be ruled out given the amount of bad news around,'' Blythe said. By 12.15 p.m. (0215 GMT) the dollar was perched on a ledge of support at $0.5798/03 having been down this morning as far as $0.5785, its lowest reading since mid-1986. It had kidded from $0.5865/70 late here on Friday. Dealers said there was some chart support at $0.5750 but little in the way of pivotal bulwark at $0.5715, the dollar's all-time intraday trough from 1986. Indeed, they noted the A$ had been the worst performing Asian currency over the last month, losing ground even against the Thai baht and Indonesian rupiah. This in part reflected its relative liquidity, but also damaging developments for global commodity prices, particularly the Russian crisis. There were fears Russia, as a major producer of commodities, would be desperate to raise foreign currency by dumping stock while the devaluation of the rouble meant it was able to undercut competitors like Australia and Canada. Latin America was also being drawn into the malaise with Venezuela devaluing in all but name on Friday. ''Russia was clearly a new dynamic and now the emerging market weakness has spread to Latin America,'' said Tim Moloney, currency strategist at Deutsche Bank. ''That's increasingly led the market to price in global deflation which is bad for commodity prices and so the A$.'' One strand of this was reflected by the influential Commodity Research Bureax index of futures contracts which crumbled to its worst close in 5- years on Friday. The Chicago-traded index shed a hefty 2.54 points to 200.54, bringing its losses this year to 12.5 percent and leaving it a massive 54.25 points below last year's peak. In the past two decades, the Australian dollar has shown a strong correlation to the CRB, reflecting the fact that 60 percent of Australia's exports were commodities. Although uniformly bearish, analysts had different grades of pessimism with some seeing a potential floor in the $0.5500 to $0.5650 area while others had targets at 50 cents and even $0.4610. Dealers expected the Reserve Bank to support the currency well before these sort of levels were reached, but wondered what realistically the central bank could hope for given the overwhelming tide of bearishness in world markets. ''We don't believe there is a line in the sand, nor do we believe it prudent for the RBA to draw a line in the sand in terms of bilateral exchange rates,'' said Richard Gibbs, senior international economist at Macquarie. Copyright 1998 Reuters Limited.

To: Enigma who wrote (16488)	8/24/1998 5:22:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116762

"Dealers expected the Reserve Bank to support the currency well before these sort of levels were reached, but wondered what realistically the central bank could hope for given the overwhelming tide of bearishness in world markets. " Nothing, but buy their Gold plus some more back...Same goes for Japan...

To: Enigma who wrote (16488)	8/24/1998 6:49:00 PM
From: Ahda	Read Replies (2) \| Respond to of 116762

Enigma i can't even give you a guess becuase s each currency gets hit gold goes continues down. I think that we have to watch US currency and the question becomes timing and the more i learn the less i know. My son and spent along time discussing this and who is right pro con well i feel that US is investing where others are really down. That could be a plus Europe seems to be strong so it just seems to me that Europe UK and USA are sort of separate from the problems of Asia maybe benefactors. I dont have a chart to check but gold and Asia probably ran down hand and hand. I can tell you our interest dosn't give us much flexibility to stimulate if our economy to halt. I can also say the US is such a blend of peoples that what is going on elsewhere is opportunity here. Probably even more so as most likely we will be more y2k compliant than anyone else. That might be a plus for our banking industry. I think the simple answer for gold lies in when our dollar starts to topple. Many others have and it sure hasn't been a plus for gold. I have said to much and it amounts to nothing concrete.