AUD/USD: Looks like RBA want to take advantage of current momentum

The RBA is one of the more savvy central banks, keeping a close eye and ear on market movements and sentiment and using this to their benefit. I think they realise that if they can talk their currency down, just like other central banks have been doing for years, then they’d be silly to pass up on the opportunity.

AUD/USD briefly traded below .9100 and we should also keep a close eye on AUD/NZD, with stop-loss sell orders reportedly sizeable below 1.1725.


  1. That’s interesting Sean. If the oil keeps going up while the AUD keeps falling, we will soon pay 2 bucks per litre at gas stations. Inflation will then be skyrocketing?

  2. The price of most consumer goods will go through the roof , new cars , electronics etc
    There is no benefit to having a low currency . A low currency is a sign of a sick economy . We are going to get less for our exports and pay more for the imports.
    Happy to hear some one try to explain that one.

    1. Hi Michael,

      We will indeed pay more for our imports and o/s travel (which is really just another import). Bummer.

      However, we get more for our exports. FE and coal are our two biggest and are sold in USD, therefore we get more Aussie dollars. Education is now our 3rd biggest export and it becomes cheaper for students to come here. Ergo, more students = more Aussie dollars. Gold – same as coal & iron ore.

      Basically, we become more competitive for anything we export, which gives the non-mining sectors (also manufacturing, tourism, other services…) a bit of relief.

      It’s true that a lower Aussie is a sign of a weakening economy, with the end of the boom. a fairly sick global economy and so on, but it’s a definite plus for exporters.

      Oh yes, another downside is that a lower Aussie imports inflation, so interest rate pressures should head up again over longer time frames, and ‘in theory’ that should see a currency once again appreciate as the cycle repeats

      That’s my understanding of how it’s supposed to work anyway.

  3. What’s the view of our new (old) prime minster Kevin Ruud on this? Gillard kept telling exporters to bear the strength of AUD for many years to come. If Ruud expresses a different view than Gillard, the Aussie will head for .85, who know??

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