Aussie breaks 80 cents on Budget bull

by Chris Becker

It’s all good news for long bets on the Aussie dollar post the 2015 Budget last night, breaking through the 80 cent level this morning:

audusd-m30-vantagefx-pty-ltd

Stocks are up slightly on the ASX200, with retailers surging on the upbeat Myers result, plus also being dragged up on the small business lifts in the Budget.

 

Comments

  1. That RBA ZIRP strategy code name “Operation Pea Shooter” is proving a rip roaring success at resisting the predatory capital that is being unleashed by the ZIRP policies of foreign central banks.

    Time to plug the worst holes in our capital flow dykes.

    1. Restrict government bonds being sold off shore

    2. Restrict private Bank IOUs (which due to the taxpayer guarantee are effectively government bonds) being sold off shore

    3. Restrict mere transfer of ownership overseas of major capital assets including land.

    These may not be a complete solution but they can be introduced gradually and taking hundreds of billions of predatory capital entry points off the table cannot hurt.

    The dollar can be managed down to a level that reflects our trade performance rather than the capacity of our government and our government (in the form of private bank guaranteed IOUs) to sell out the future of the country.

    Our trading rivals and exchange rate manipulating buddies are waiting at their computer terminals ready and willing to acquire the next tranches of Australian Government bonds that Joe will be printing at a great rate.

    • The vagaries of monetary policy are clearly puzzling for governor mumbles as well. It’s like watching the time warp dance in Rocky Horror.

      • Well that particular track did cater for both ends of the spectrum what with jumps to the left and steps to the right.

    • It goes without saying.

      The RBA will keep clutching for the ZIRP cheese even as the repeated electrical charge produces a smell of burning flesh. Just a pity it is our flesh that is getting zapped.

    • Surely we have to see another rate cut in June.

      You would think so. We might see Glenn trotted out in the next few days to make it abundantly clear the RBA isn’t done cutting.

    • wasabinatorMEMBER

      The question isn’t if, it’s how much of a cut.

      Also, ZIRP won’t be the endgame, NIRP will.

      • You will need to ask Gov Glenn for confirmation but it seems fairly clear that the government are quite confortable with the current approach of trying to keep the economy running on a diet of home loans and those are proving harder to shift without lower and lower rates.

  2. Chris, are you shorting AUD here, or buying more USD?

    Seems like they’ll absolutely have to cut in June now.

  3. AUD getting caught in the DXY flame-out. German 10 year bunds yields more important to watch than RBA.

    • Yeah tbh I’m seeing action in Europe impinging upon the DXY having more to do with this than anything Fatboy did, but @ the end of the day a chartist can’t afford to really care!

  4. Joe Hockey just said at the National Press Club that Janet Yellen told him that the USA is almost at full employment.

    What a joke…..

    • Did he mean that it was a good thing? If it were true, which it isn’t, that would indicate that rates in the states may start rising sooner rather than later.

      How does Joe think that will play out for a debt driven CAD economy like Oz running into a terms of trade cool room?

      Presumably his Government Issue De Lorien has flown him back to the days when the US consumer could save the world. Not much steel in an iPad Joe.

      Poor Joe – he really doesn’t have a clue.