Can Australia’s currency continue its rampage while exporters burn? The currency wars have been going on quietly here at home for some time now. And going by the state of our exporters, we’re losing.
February 4th, 2012 | Nickolai Hubble | 3 comments | ContinuedAll Posts Tagged With: "aussie dollar"
The Downside of a Strong Australian Dollar in the New Brand of Capitalism
The strong Australian dollar makes some export industries chronically uncompetitive. Not only does this make them bad investments, it damages their ability to remain a going concern.
January 24th, 2012 | Dan Denning | 4 comments | Continued
It’s The Only Play Central Banks Know
The credit cycle has turned. The world is in a deleveraging phase. But central banks are still trying to reverse the process and provide more credit to households and businesses? They really only have one play in the playbook.
December 1st, 2011 | Greg Canavan | 0 comments | Continued
Merger and Acquisition Activity in Coal, Iron Ore and Gold
That brings us to the merger and acquisition activity in Australia. You may have seen that gold producer Lihir received a $9.2 billion takeover offer from Newcrest over night. Lihir says the offer undervalues the company’s assets. But whether it does or doesn’t, does the bid remind you at all of the BHP and Rio Tinto shenanigans a few years ago?
April 1st, 2010 | Dan Denning | 2 comments | Continued
Rally in Stocks and Rise in Aussie Dollar is a Result of the Carry Trade
That’s just what happened last year. Only then, it was both a dollar and yen carry trade that led to a rise in Aussie assets. Once the credit crisis set in, the yen carry got dropped and investors fled risk assets and piled right back into the greenback and U.S. Treasuries.
October 29th, 2009 | Dan Denning | 9 comments | Continued
Banks Could Face Larger Asset Writedowns and Losses than IMF has Modelled
Next time around, though, we reckon the losses – when they come – will be on domestic real estate assets. And with so much exposure to domestic real estate (mortgage loans), the assets could face a world of hurt. But even if bank asset quality doesn’t crash (housing prices don’t crash), an external shock affects Aussie bank liabilities.
October 28th, 2009 | Dan Denning | 2 comments | Continued
The Only Thing Really Going Down Right Now is the U.S. Dollar
Okay. Who put the financial world in a time machine and took us all back to 2007? Seriously. Oil traded above $80 overnight. Gold is hovering near $1,060. Stocks are up. Bonds are up. The Aussie dollar is up. Will anything ever go down again?
October 21st, 2009 | Dan Denning | 2 comments | Continued
Stocks Better than Bonds When Inflation is a Big Threat
What we make of it is that dividends used to account for a much larger percentage of your total return in stocks than they have in the last twenty years. Times change. There’s no rule that says the future has to be just like the past. But if stocks beat inflation, should you invest in stocks for income or capital appreciation? That’s the second question.
October 19th, 2009 | Dan Denning | 4 comments | Continued
A Flawed Theory on How to Manage an Economy During a Recession
Your editor spent last night in a discussion with a querulous and drunk Aussie over the stimulus. “It looks like it worked to me,” he said. “Only world economy still growing. GDP up. We’ve got China. Looks like Ruddy and Swanny know what they’re doing. You’re just a hack. You’ve never run a country. And you’re a Yank!”
October 13th, 2009 | Dan Denning | 100 comments | Continued
AUD Price of Gold a Measure of Gold’s Strength Against Other Currencies
Ah. So for gold to move in Aussie dollar terms there has to be more than just a big bear market in the USD. Demand for gold has to rise globally.
October 9th, 2009 | Dan Denning | 2 comments | Continued
Aussie Dollar is Crushing Long-time Rivals Like the Pound and the U.S. Dollar
One way to view a currency, we read somewhere recently, is as a national obligation secured by national assets. Those “assets” are loosely defined as economic growth (GDP) or the tax revenues a government can generate. A growing economy generates royalties and income taxes and demonstrates to international bond investors Australia’s ability to service interest and principal on debt.
October 9th, 2009 | Dan Denning | 18 comments | Continued
U.S. Dollar Index Showing All Sorts of Weakness
The U.S. dollar taketh…and the U.S. dollar giveth away. That’s one way of looking at the flurry of activity in markets right now. The Aussie dollar is at a ten-month high. Oil is up 75% since January, with crude trading at $74/barrel. Copper is at a ten-month high. The S&P 500 has cracked 1,000 again.
August 4th, 2009 | Dan Denning | 5 comments | Continued
This Reflation is Not Yet a Monster Hyper-inflation
The market begins the month of August trying to prove that the Great Recession is over and the earnings recovery has begun. On Friday, US GDP data came out and seemed to confirm that just maybe the worst is behind us. According to the cryptic figures, US GDP is shrinking at annualised pace of just 1% – considerably less than the 6.4% from late last year.
August 3rd, 2009 | Dan Denning | 0 comments | Continued
Glenn Stevens Says Australia’s Economy Has Been Travelling Better Than Others
We’ll see about that. Stocks are certainly pricing in a profit recovery (about which we have our doubts). But Mr. Stevens also had a bit to say about credit markets and balance sheets, in comments that were not as widely reported as his comments on Australian housing. More on housing in a second.
July 29th, 2009 | Dan Denning | 25 comments | Continued
Paying Attention to the Risk from Deleveraging in Commercial Real Estate
Standard & Poor’s is preparing to downgrade some $235.2 billion of commercial mortgage-backed securities (CMBS), according to our friend Dan Ferris. When these downgrades occur, the banks and insurance companies that own this paper are going to have a big problem,” Dan says. “Prices are already down around 25% in the past year.”
June 30th, 2009 | Dan Denning | 13 comments | Continued
