Abbott talks up the Australian dollar

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From Forexlive:

Australian PM Abbott speaking in Beijing:

  • When the AUD was at US$1.05 it “did impose certain strains on our economy”
  • “The levels that we’ve seen it at in recent months are probably more comfortable for more people”
  • “But nevertheless it is a market-driven currency. Let’s see where the market takes it.”

Here’s a pop quiz:

  • Q. What’s a market made up of?
  • A. People (and algos).

People in markets are driven by fear and greed. If you want your currency to fall do you tell those people that it’s at a comfortable level or do put the fear of losses into them?

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Is it really too much to ask that “Team Australia” jawbone the currency as one?

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.