DislikedIt's the same case as with BoJ and SNB. Overvalued currency is not healthy for their mainly export economy. Bloomberg is already stating the aussie is 27% overvalued in PPP. Signals here, signals there...Ignored
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DislikedIt's the same case as with BoJ and SNB. Overvalued currency is not healthy for their mainly export economy. Bloomberg is already stating the aussie is 27% overvalued in PPP. Signals here, signals there...Ignored
DislikedI read that a big position is being protected at .9475 so I'm short when it nears that level.
(first post)
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DislikedRBA wont intervene to defend the currency level.Its never been their mandate.They may however sell to position themselves.
They bought when the currency was under pressure from a disorderly market down in the low 60's, so 30 odd big figs later they may look at it to take profit and boost reserves.Ignored
DislikedThere are many ways to "intervene". I'm not saying RBA is going to directly intervene in the fx market as SNB and BoJ did, but they could do so with the yield, but again with high inflation they can't cut interest so they are in a dilemma soon to be address.
Purchasing power parityIgnored
DislikedThere are many ways to "intervene". I'm not saying RBA is going to directly intervene in the fx market as SNB and BoJ did, but they could do so with the yield, but again with high inflation they can't cut interest so they are in a dilemma soon to be address.
Purchasing power parityIgnored
Dislikedplease note that Purchasing power parity really has nothing to do with exchange rate values..just because exchange rate is high for example over 1 doesnt mean they cant maintain current cost for exported product... inventory pricing will just be adjusted... its all relative.. if they maintain pricing it becomes a problem as they will be charging more than the rest of the world..
for example.. waygu beef...aussies know what im talking about
australia exports waygu beef the exchange rate is 1:1...Ignored
DislikedAgree on that PPP alone is not a good indicator, I'm quoting what bloomberg says and that to me is just a signal that the market is uncomfortable.Ignored
Disliked"if rba raises rates to cool the economy and circulates more money into the market."
Higher interest rates infact stiffles consumer spending.It will get to a tipping point that when interest rates become so expensive it cuts off business growth and that puts downward pressure on the economy.
Thats when we see AUD sellers emerge.
An extreme example is Zimbabwe.. High interest rates and weak currency.Ignored
DislikedDoes the news event in 45min usualy have a huge impact on the pair?
Is it normal to see 50 pip moves in few minutes?
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Dislikedhmmm.......markets might take these minutes as negative. They did mention that inflation expectations had eased, while international economy had slowed. No hint of interest rate bump......
read the last paragraph
http://www.rba.gov.au/monetary-polic.../07092010.htmlIgnored