Well what an interesting two weeks! The AUD progressing towards .80c and a great unemployment rate at 5.8%. When is this all going to end?
The bewilderment of the Federal Reserve’s monetary policy decision making, leaves the world asking where can I ‘get some yield’?
Well, in Australia you can. Commodities having bottomed sees pretty pictures emerging. With the likes of experts calling a stronger ‘USD’ from the start of this year – one has to query what is going on in America. Simple answer: no one is spending MONEY. Hence the procrastination of the Central Bank.
Globally rates remain near zero and at present Australia offers a great alternative – growth with low inflation is the new ‘normal’ in the land of Oz. The AUD appears set to take on the RBA Governor and stretch its legs further towards .81c. We really need some strong USD economic numbers or else the Fed will have its hands tied for a lot longer than most thought.
Glenn Stevens speaks tomorrow at an ASIC forum which will be keenly watched. Markets will be looking for comments about the currency strength and any hints as to whether the RBA will use some of their scope for easing to combat the recent upsurge.
One problem the RBA may have thought they were coming to grips with are house prices, however Melbourne and Sydney still are still areas of concern. The Sydney property market is heating up again even if it is not quite as frenzied as it has been at times during the last few years. Over $660 million of property exchanged hands at auction in Sydney over the last weekend, with a clearance rate above 75%. The median sale price was $1,169,500, which is 10.6% higher than the pre-Easter weekend last year.
USD/SGD continues it’s downward move towards 1.3200. As previously mentioned, it achieved its 1.3500 target and looks set for a new target of 1.3200.
The Currency Guru