Weeoo, weeoo, weeoo. The counter-contrarian signal generator know as The Pascometer is wailing that the Aussie dollar doesn’t need to fall, so get short with both hands (joking, sort of)!
There it was again in the Reserve Bank governor’s brief statement on Tuesday: a selective use of dates and statistics to tell a story about the Australian dollar.
“The Australian dollar has declined noticeably against a rising US dollar over recent months, though less so against a basket of currencies,” Glenn Stevens said.
..But as is so often the case with figures, a lot depends on the time frame you might choose to use to spin your angle…what the RBA has been omitting is that the Aussie didn’t rise by as much on the TWI as it did against the US dollar in the first place.
…But let’s not let such perspective get in the way of a good jawboning.
Let’s check out that chart for the TWI, which remains at paralysingly high levels (higher than any time in modern history barring three years in the 1970s) versus what the economy needs to recover its competitiveness as the commdoities bust rolls on:
Note the Pasconomic window, which isn’t remotely using “selective dates”.
But that is all to the good. For those in the know, this is yet another signal that both the cash rate and the dollar will continue to fall forthwith.
Weeoo, weeoo, weeoo.
