From contrarian signal generator The Madometer today:
No one should be surprised that the Australian dollar has spiked. The unit may have given some of that back overnight, losing half a cent or so, but still, the fact that policymakers couldn’t foresee it is deeply troubling.
So much has gone into driving the dollar down, yet after all their efforts what have we been left with? What have policymakers actually achieved by participating in the currency wars?
Nothing — that’s what.
…The only sensible option open for them then — for the health of the economy and for stability — is to drop the currency target and leave off from publicly commenting on its level.
I guess the currency is ready to roll over though my own view is that this signal is a bit early given the signs of more US dollar weakness ahead.
