OK, so after a few days of random musings about one thing or another it's time to get back to the markets. And not before time, as the All Ordinaries forgets about the woes of a couple of months ago and surges further and further away from 6,000 points. At the close yesterday the index reached 6,183.60.
That took the days gain to 0.66%. Over the course of last week the All Ordinaries gained by 1%, with new all-time highs becoming almost a daily event.
Overseas, the US market also had a positive week with the Dow Jones Industrial Average gaining by 0.4%, capping off a second week of gains.
While in Europe, the FTSE100 index also closed ahead with a 1% advance. Although as was the case here in Australia, much of the attention in financial markets was focused on the continuing weakness of the US dollar/Lira/Peso.
How low can the Greenback go? It has supposedly reached one psychological barrier after another and yet after a bit of respite it continues to fall. Overnight Pound Sterling was ominously close to reaching USD$2, a level not seen since the Pound was thrown out of the European Exchange Rate Mechanism (ERM) nearly fifteen years ago.
Meanwhile the Australian dollar continues to trade comfortably at around USD$0.83. The exporters may not like it, but consumers and importers are loving it. More plasma televisions please. More imported cars please. More anything from overseas while it's cheap please.
Joanne Masters, a currency strategist at Macquarie Bank Ltd told Bloomberg News, “We're continuing to see a liquidity push out of Japan and carry trade interest. For the moment that's where the momentum is for the Australian dollar.”
Kris Sayce
The Daily Reckoning Australia
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About the Author
Kris Sayce began his financial career in the City of London as a broker specializing in small cap stocks listed on London's Alternative Investment Market (AIM). At one of Australia's leading wealth management firms, Kris was a fully accredited adviser in Shares, Options and Warrants, and Foreign Exchange. Kris was instrumental in helping to establish the Australian version of the Daily Reckoning e-newsletter in 2005. In late 2006, he joined the Melbourne team of the leading CFD provider in Australia.
