The Australian Dollar


Since hitting a low of $US0.5530 on 28 August, the AUD has recovered by over 17% to a high of $US0.6480 on 19 November. Several factors have been at work to boost the A$ against the $US over this time.
The RBA supported the A$ in late August-early September, as documented in the Semi-annual Statement of Monetary Policy (Nov 17, 1998).
A sharp weakening in the $US against the Japanese yen during September-October from 140 to a high of 113, settling into a 118 - 122 range.
Foreign (hedge fund) purchases of A$ in September-October to reverse previous 'short' A$ positions.
More recently, there have been broad-scale A$ purchases on the back of (1) Australia's economic growth ...

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friend", all the fundamentals must be taken into account in the longer term. The fundamentals currently being overlooked (which we feel will come to matter) are (1) the outlook for commodity prices; (2) the extent of the Asian recession, (3) the path of the current account deficit deterioration and (4) the prospects for interest rates.
Despite some success in diversifying the export base away from near complete reliance on primary commodities, Australia remains one of the world's most commodity dependant economies, and hence the term "commodity currency" for the A$,. Recent data confirms that primary products account for around half of total exports of goods and services, with total manufactures at 25%, and services accounting for around 23%.
There is considerable uncertainty over commodity prices. Prices for many commodities are at their lowest levels for several years. While there is considerable anticipation in some markets for price improvements for individual commodities, ...

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"The Australian Dollar." Essayworld.com. May 4, 2006. Accessed October 16, 2018. http://www.essayworld.com/essays/The-Australian-Dollar/45390.
"The Australian Dollar." Essayworld.com. May 4, 2006. Accessed October 16, 2018. http://www.essayworld.com/essays/The-Australian-Dollar/45390.
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PAPER DETAILS
Added: 5/4/2006 05:44:57 AM
Category: Economics
Type: Premium Paper
Words: 615
Pages: 3

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