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Thread: AUD.USD

  1. #1
    Guru Xerof's Avatar
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    Default AUD.USD

    One of my favorite 'big picture' fundamentalists, worth a read - their latest rendition on a theme they've pushed for the past couple of weeks

    http://www.fxstreet.com/nou/content/...ket&banner=bsc

    download the link at bottom for chart

    Xerof

  2. #2
    action-reaction arco's Avatar
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    Yes Xerof, interesting article from Black Flag.
    From your experience do you find their predictions accurate?

    Incidentally, I did mention on 24 Feb in another forum.

    AUD.USD
    NZD.USD
    AUD.NZD

    ......... all look like shorts medium term IMO.

    Arco




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  3. #3
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    Arco,

    re Black Swan article - I have found them to be early indicators of directional moves in the past, but like any commentary primarily based on fundamentals, the next data set can change a view pretty quickly. I like to keep a wary eye on what they are saying as it all helps to build a more complete perspective. Jack Crooks certainly gives an incisive perspective, IMO

    But "In a New York minute
    Everything can change
    In a New York minute
    Things can get pretty strange" - Don Henley

    And yes, I have posted my plaudits re your earlier calls elsewhere. I was calling for one more exhaustive rally, before a change in trend, but was not to be. Certainly think the uptrend is over now, confirmed by the break of .7150. A few commentators now calling for 60 cents in the fullness of time. I'll take it a step at a time but will play from short side now

    regards

    Xerof

  4. #4
    action-reaction arco's Avatar
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    Spotted this on cyber-travels.......

    MARKET TALK: AUD/USD Risks Skewed To Downside - ANZ
    Risks surrounding AUD/USD have altered substantially, and rather than be a buyer on dips, ANZ now a seller of rallies.

    Craig Ferguson, senior currency strategist, says there's still some potential for a final drive to above 0.8000, but confidence for such a move now only 20% to 30%. Now expects AUD/USD at 0.6600 by December 2005 and 0.6200 by December 2006. Pair now 0.7675.

    Craig Ferguson was the most bullish on the Aud in the past 6-9months


    Yeah, got butterflies in your tum now eh Craig !!











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  5. #5
    action-reaction arco's Avatar
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    A little more fundamental info

    AMP Bet on Australian Dollar Drop as Growth Ebbs State Street Corp., the biggest provider of investment services to institutions, and AMP Capital Investors are betting the Australian dollar will end a three-year advance as the Asia-Pacific region's fifth-largest economy slows.

    The firms plan to reduce their use of derivatives contracts that protect them from an appreciation in the Australian dollar, said executives at the companies. Colonial First State Investment Management, Australia's biggest investor, said it hasn't hedged since 2003 and considers the currency "overvalued.''
    "The need to hedge international equity exposure back to Australian dollars is far less compelling than it was a few years ago,'' said Shane Oliver, head of investment strategy and chief economist in Sydney at AMP, Australia's second-largest money manager. ``An Australian economy that is slowing and an interest- rate differential that is probably going to narrow with the U.S. also argue for a lower currency.'' Oliver said the Australian dollar may weaken to 75 U.S. cents by year-end, from 77 cents at 8:20 a.m. in New York on March 28. The currency is being buffeted by the slowest economic growth in four years last quarter and a record drop in consumer confidence this month. The proportion of manufacturers expecting to increase production is at a three-year low, according to an industry survey on March 18. The yield Australian government 10-year bonds offer above similar-maturity Treasuries narrowed to 1.10 percentage points March 28, half a percentage point below the level of a year ago. The average for the past two years is 1.35 percentage points.The Australian dollar is overvalued at these levels near 80 cents,'' Warren Bird, head of fixed interest and foreign exchange at Colonial in Sydney, said in an interview. "We have no interest in hedging now.'' Colonial First State Investment Management, Australia's largest money manager with A$100 billion of investments, doesn't hedge any of its A$2.6 billion of global equities. Bird hasn't protected against gains in the Australian dollar since July 2003 when the currency rose above 68 cents for the first time since February 1998. If Dryden, Oliver and Bird are correct, investors who listen to JPMorgan Chase & Co, Deutsche Bank AG and Lehman Brothers Holdings Inc. may suffer. The median forecast of the 36 traders, investors and strategists polled between Jan. 4 and Jan. 20 was for a drop to 76 cents, according to a Bloomberg survey published Jan. 27.
    Slowing economic growth and a narrowing interest-rate advantage will weaken the Australian dollar by Dec. 31, said Oliver, who has worked at AMP since 1984.
    Australia's economy grew 0.1 percent in the fourth quarter, the government said on March 2. The slowest pace of expansion in four years spurred speculation the Reserve Bank of Australia will limit interest rate increases this year. The central bank lifted its benchmark rate to 5.5 percent on March 2, the same day the growth figures for the final three months of last year were published. It was the first increase in 15 months. The Federal Reserve has increased its target rate for overnight loans between banks seven times since June to 2.75 and said inflation pressures are picking up. The statement spurred speculation the Fed will scrap its policy of gradual increases. The Australian dollar may also decline because traders are betting on its advance in near record numbers, said Oliver. The difference in the number of wagers by hedge funds and other large speculators on an advance in the Australian dollar compared with those on a drop -- so-called net longs -- was 54,991 on March 22, more than three times the yearly average of 16,224 figures from the Washington-based Commodity Futures Trading Commission show. The positioning story is negative, with all the traders long the Australian dollar, there is less of them to buy,'' said Oliver. A trader who is long an asset bets on it gaining.


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    To be fair on Craig, he did say a break of .7770 would be a signal that the (double)top at .8005 and .7088 was now "in."

    My only current concern is that the decline does seem rather orderly, but if it can gain some momentum to the downside over the next few days, it'll be safe to stay short for the medium term target of around 65 cents.

    Note that as well as record longs on the IMM, the Uridashi maturity profile for April/May is also a rather large number[:0][:0], so keep an eye on new issuances - if they don't appear, then the overhang of AUD longs may be just a tad too much for the market to handle.....[]

    Commodities don't look that flash either, Kiwi looks terrible - USD looks good for the moment....

    Oh well, may as well just go and sell some more....

    Xerof

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    0931 GMT [Dow Jones] ABN-AMRO says latest IMM spec positioning data (released before Fri's close) up to and including Tue Mar 22 shows USD short positions were cut to $11.9B from $15.3B in the prior week. A reduction in CHF, JPY and GBP longs made up most of the shift, although AUD longs continue to defy gravity, remaining close to recent record longs.

    Might have been a bit of long liquidation over the Easter period, but oh dear, this could get nasty.

    Caveat Emptor, as they say

    Xerof

    PS This fact (no major liquidation) may explain why its been quite an orderly decline so far...

  8. #8
    action-reaction arco's Avatar
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    The Aussie and Kiwi have historically been volatile currencies but the factors underlying the strength of the past few years is clear. Interest rates in Australia and New Zealand have been high relative to the other major currencies and commodity prices are generally firm. In March of 2004 the interest rate advantage began to deteriorate. There is a delay between changes in the interest differential and when it affects a currency, but it has been a year and this is a negative sign for the AUD. The CRB index rose 23% in 2002, 9% in 2003, 11% last year, but the cycles argue they have formed a significant peak. The factors that previously supported the Aussie are now weighing against it.

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    AS long as RBA don't do anything stupid, downside dominates for this week

    0.7700 currently

    Xerof

  10. #10
    action-reaction arco's Avatar
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    Xerof

    The short term uptrend line has been broken,
    and is being tested for change of polarity.

    I will be initially looking at 7568, with
    thoughts of 7324-7446 which is about where
    the medium term uptrend line should intersect.

    Currently 7669.

    Arco

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