Australian dollar universally tumbles as exhaustion sets in

See the latest Australian dollar analysis here:

Macro Morning

DXY was up Friday night and still looks very strong:

The Australian dollar tumbled against every cross:

Despite gold taking off:

Oil too:

But dirt sagged:

Miners were bid:

EM stocks are stalled:

Junk fell:

Bonds were soft:

Stocks eked out a gain:

Global data is still so bad that it is being ignored. We remain in the virus Twilight Zone zone where the stasis of shut down economies supported by policy is all that matters and the price of equities benchmarks everything.

There are bullish arguments for the Australian dollar in China leading the recovery, iron ore and our virus success.

There are bearish arguments for the Australian dollar in Cold War 2.0, mass unemployment, falling house prices and entering Winter.

Neither matters yet. Only this does:

The path of stocks is still the path of the AUD.

David Llewellyn-Smith
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Comments

  1. “There are bullish arguments for the Australian dollar in China leading the recovery, iron ore and our virus success.”

    But you don’t believe these do you?

    • happy valleyMEMBER

      Yep, what not’s to love for a CBer to be able to r.pe depositors with NIRP?

      • DominicMEMBER

        You do know that contemporary economists (including all central bankers) believe the following:
        – savers are ‘rentiers’
        – savings are dead money
        – the economy doesn’t need savings
        – and so on …

        True story. No wonder we’re in such a colossal mess.

      • If im not mistaken Australian interest rates were quite a bit higher than US back then?

        • Do you think the fed will print so much relative to the RBA that it will replicate the interest rate differential that we had last time? Asking for a friend who is mostly in US dollars

          • matthewMEMBER

            No peachy it means you are deeply conflicted and that you have been dishonest in not declaring yourself when you were called out previously.Am surprised you are tolerated here

      • DominicMEMBER

        And we all know what happened thereafter – stocks cratered. Bottomed in March 2009, just so you know.

        That said, Powell’s got the printers going at warp speed, so any falls from here shouldn’t be too great. The Swiss National Bank continues to buy US stocks – and if that isn’t sufficient I’m sure the Fed will step in directly too. And gold investors should sleep well while those printers are working overtime.

          • DominicMEMBER

            If Powell needs a hand predicting the future tell him to give me a call.

            Money printing 4eva. Zero rates. Got it? 😉

  2. happy valleyMEMBER

    So, the AFR has an article today saying that the market is tipping that the RBA happy clappies, in their next round of Angel of Death experiments on savers/depositors, will cut the cash rate to zero next month, so that their private bank mates can screw over savers/depositors again to cover for irresponsible borrowers and bankers’ irresponsible lending?

    • DominicMEMBER

      You sound surprised.

      Euthanasia of the rentier — t’was foretold in the Book of Keynes. 😉

    • Hv
      It sounds like they are preparing us for negative 0.5% cash rate
      What a disaster

      Has anyone explained to these clowns negative compound interest
      You go to $0 much quicker through negative compounding

      Aust will be in a full blown depression this time next year with @ 30 to 40% unemployment
      Very sad for many