Australian dollar slammed to new lows, ASX stuck

See the latest Australian dollar analysis here:

Macro Afternoon

Aussie is trading at new lows post-RBA minutes:

Bonds are still bid:

But the ASX can’t manage more than a whimper, though support is holding:

Dalian is firm:

Big Iron meh:

Pensioner Killers still cock-a-whoop:

Nothing can stop Big Gold, not even falling gold:

Big Sleazy is down on APRA tightening:

Big Dirtbag is soft as well with FXJ sinking post-float:

Time to sack some more writers.

David Llewellyn-Smith
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  1. AUD …. this is really great = enhanced mining and overseas income receipts ; banking/other loans “may” now be predominantly sourced locally, rather [also considering relative interest rates] – hence lessening financial risks; upward/*inflationary* [ rather than the to-be-avoided stagflation ] import-price pressures and our assets become relatively cheaper without having to adjust downwards in local-currency terms.

    The *Goldilocks* zone [ = not too hot and not too cold ] … could not be better !!

    • Indeed – lower AUD is good for our tradeable sectors, all else being equal.

      Question is though – is all else equal? If the strength in DXY was the only reason causing AUD weakness then fine.

      But if AUD weakness is due to our: 1. weak economy, 2. dead consumer (who gets hit further when AUD cost of imported goods go up), 3. China slowing, 4. lower commodities – then those things offset the good stuff.

      I’d say of those four things the first two are real. The third looks real but China could stimulate. The fourth should follow the third – but depends if the third happens.

      Take your punts!

      • Economic growth : We know we have reasonable economic growth and will continue to have = AUD not weak because of that therefore;

        Dead consumer: We know that Private Consumption Expenditure growth is stable ~ 60% of Gross Domestic Product

        China slowing + commodities: that would impact economic growth, essentially … and I’ve addressed that above.

        The main point you miss is the interest rate differentials … that’s causing the AUD weakness ; but, and this is the important part …………………… interest rates weakness relative is a PLUS !!!
        = The “Goldilocks* zone, mate

  2. Best way to shift money out of Aus Banks and get direct USD exposure? Betashare yank or USD ETF safest option other than physical USD’s? I have a ‘substantial’ amount of cashin Aus banks and need to do something more productive with it / limit risk.

  3. It’s zooming up at the moment! I presume on London opening? Hits .7536 or so and in last half hour has rocketed. It’s bloody weird trying to work out why it does the things it does. The biggest thing I can put to it is pure speculation. A bit like how our whole economy seems to be these days.