As you are all aware, if you are holding assets (all) in USD's you are heavily exposed to one ccy and the dollar in your wallet is shrinking in global purchasing power. I am keeping an eye on this chart, if/when it arrives in the .8200 to .8400 area i will begin advising US based clients to move funds from USD's into AUD's in the form of AAA Rated corporate bonds, CD's or other fixed income, where you can receive an interest rate differential of approx 4-6% over USD FI. There is high probability for gain in both exchange rate and interest rate differential for a possible 12-20% 12mo gain. It is possible AUD will be above .95 after July of next year. I am a primarily a TA, but also well understand the fundamentals and use them both in my personal trading and Fund Management. Interest rate spreads and the economic foundation support this view. I believe it is a good risk reward trade/position. Oh, one more thing. Negotiate a good spread from your bank when converting. You should pay no more that 50 ticks on exchange rate, depending on volume. Over 100K, no more than 10. Private bank, no more than 3 on cash conversion.
Good Luck,
Houdini, CTA
Good Luck,
Houdini, CTA
You are what you do, trade with discipline. Chris Lori, CTA