Good day… A pretty quiet day in the currencies yesterday, with little or no movement until the overnight session. Overnight we've seen some slippage in the yen with more Bank of Japan jawboning the currency down. One of my fave currencies, Aussie dollars, finally hit the psychological level of 80-cents. This and more on a Tuesday morning, two days before I leave for my spring vacation! YAHOO!
OK… First the good news… I've long said that Aussie was an 80-cent currency, and I noted to the people on the desk yesterday that it was oh-so-close to that level, and I hoped it didn't disappoint us like sterling did when it got oh-so-close to the 2.00 level. But as I turn on the screens this morning, there it is, right before my eyes! Aussie dollars trading at 80-cents! This is the highest level for the Aussie dollar since 1996.
So… Now you ask, "Is that it for Aussie?" Ahhh grasshopper… That's a good question… And I don't know anything more than the next currency analyst, but my opinion is no! There's just too much "good stuff" going on in Australia, and with high yield currencies really doing well right now, I expect more gains from the Aussie dollar.
I could say that I expect it to get to… No wait! That's like going ahead and putting your head on the slate for the executioner! But, if you ask me really nicely… I will tell you that I wouldn't be surprised to see it stretch five more cents… But you can't hold me to that, because you asked nicely!
Oh, and it's not just Aussie that's moving higher in the South Pacific… Kiwi has crossed the 70-cent level.
Chuck Butler
for The Daily Reckoning Australia
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About the Author
Chuck Butler, is the author of The Daily Pfennig, which is republished here at The Daily Reckoning. His respected analysis is frequently quoted in or referenced by: the Wall Street Journal, U.S. News and World Report, CBS Market Watch, USA Today, CNNfn, the Chicago Tribune and many other publications.
Comment by Jo Petrovic on 12 May 2008:
12th May, 2008
Hi Chuck
Our 19 year-old son is travelling to Japan at the end of the week. When the Aussie dollar rose so high, we were advised to purchase US dollars for him to take to Japan to exchange for Yen there, as the US dollar would buy him more Yen. I hope we've done the right thing - purchased around $2000 US dollars to exchange for Yen. We haven't been able to source out the information we need about which buys best - US or Aussie dollars, because if its Aus dollars, he better take some of those too. Can you advise please? Jo