My above postulations are pure price action.
Now let's look at the fundamentals (and I'm no fundy trader at all).
Australia relies heavily on growth in Asia, especially China... the doomsayers have been predicting the collapse of the Chinese building bubble, and indeed growth has slowed to about 7.5% last year, BUT that's still about 300% better than any developed nation in the world, including all of Europe and the USA.
China and India have a very fast growing middle class that is about to become larger than Europe's and America's middle class combined... future growth in these countries will come from supplying to this growing middle class at a time when exports to the western world are slowing down.
Given the above, I don't see a hard landing in China that (naturely) would crash Aussie exports.
On the other side of the coin, the largest economy in the world is almost bankrupt (USA) with ever increasing national debts that no politition is willing to address. The "banksters" are in control, and they don't give a damn as long as policy favors them... this situation in America will likely work itself out in time, but not this or next year, that's a given.
In my humble opinion, Australia is indeed the "lucky country" given our geographical proximity to the largest and fastest growing middle class in the history of mankind, and our wealth of natural resources (iron ore and other minerals, natural gas, coal, shale deposits... potentially oil etc).
Can we stuff it all up? Sure we can, and our present government is trying hard as hell to stuff it up, but I doubt even a stoopid left wing labour government are stoopid enough to curb our continued ability to supply Asia what it needs to continue growing.
Lastly... the Reserve Bank of Australia could intervene and push the AUD lower by dropping interest rates a lot more, but that's VERY unlikely to happen, because low interest rates will quash the inflow of foreign capital that Australia sorely needs, indeed relies on.
In a sentence... the future looks good for the AUD.
postscript... I have read one report in which an authority predicted the AUD could go to US$1.30 within a few years. I personally doubt it, however, anything is possible. Afterall, it was US$0.55 in 2008
Now let's look at the fundamentals (and I'm no fundy trader at all).
Australia relies heavily on growth in Asia, especially China... the doomsayers have been predicting the collapse of the Chinese building bubble, and indeed growth has slowed to about 7.5% last year, BUT that's still about 300% better than any developed nation in the world, including all of Europe and the USA.
China and India have a very fast growing middle class that is about to become larger than Europe's and America's middle class combined... future growth in these countries will come from supplying to this growing middle class at a time when exports to the western world are slowing down.
Given the above, I don't see a hard landing in China that (naturely) would crash Aussie exports.
On the other side of the coin, the largest economy in the world is almost bankrupt (USA) with ever increasing national debts that no politition is willing to address. The "banksters" are in control, and they don't give a damn as long as policy favors them... this situation in America will likely work itself out in time, but not this or next year, that's a given.
In my humble opinion, Australia is indeed the "lucky country" given our geographical proximity to the largest and fastest growing middle class in the history of mankind, and our wealth of natural resources (iron ore and other minerals, natural gas, coal, shale deposits... potentially oil etc).
Can we stuff it all up? Sure we can, and our present government is trying hard as hell to stuff it up, but I doubt even a stoopid left wing labour government are stoopid enough to curb our continued ability to supply Asia what it needs to continue growing.
Lastly... the Reserve Bank of Australia could intervene and push the AUD lower by dropping interest rates a lot more, but that's VERY unlikely to happen, because low interest rates will quash the inflow of foreign capital that Australia sorely needs, indeed relies on.
In a sentence... the future looks good for the AUD.
postscript... I have read one report in which an authority predicted the AUD could go to US$1.30 within a few years. I personally doubt it, however, anything is possible. Afterall, it was US$0.55 in 2008
In the days of old when sailors were bold, and seldom if ever contented.
