Australian dollar party ends as CNY smashed

I have no idea why anyone would want to own the AUD just now but some do! As CNY is smashed the AUD is only going one way:

Bonds are bid again:

XJO is up modestly:

Dalian is weak:

But Big Iron fanboys have no idea:

Big Gas is soft on the Iran thaw:

Big is a BTFD:

Big Banks are deads cats:

Scummo’s puswads power on:

A falling CNY wrecks the global economy:

  • it drives up DXY;
  • kills EM exports;
  • kills commodity prices;
  • kills inflation;
  • kills Chinese rebalancing;
  • kills trade deals.

There is a reason that the AUD does not like it.

Houses and Holes

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 fouding 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.

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Comments

      • He he, these geniuses have been predicting “AUD TO 60 ¢” for at least as long as Ive been reading the blog, so at least 2 years…

      • Vanja they have been predicting a fall in the AUD and it has gone in a straight line from 80c to 67c, when other morons were calling for 90c, or a rebound from 73c back to 80c by end 2018 (hello Commonwealth bank), what more do you want?

  1. Of course I love AUD. I buy my lunch with it. And my cappucinos. If you don’t want yours Houses I am happy to relieve you of your burden. 🙂

    • I think you may have missed hime, as he just spent them on USD, gold, US bonds, AUS bonds, and lselected US-denominated stocks, and other global value plays 😉

  2. More seriously I make no pretence to forecast AUD as it does not listen to me. Stocks I dont buy go up much better than those I do and currency even more so. Unfortunately my ineptitude is inconsistent so I dont even make a good contrary indicator. The only way to win is to not play …….

    • If you don’t want to invest your $$ (due to a low perceived likelihood of success) then the next best option is to spend it on consumption. All of it. At least that way you get value and hopefully enjoyment from it. Just don’t keep it in cash forever or you lose anyway (inflation).

  3. Falling CNY presumably will start another round of capital flight from China, pushing up house prices.