Originally Posted by monte
That's exactly what Australia did a couple of years ago when the USD/AUD were on par. In fact they made their intentions quite clear and public to allow investors to position themselves accordingly. They stated they wanted to devalue the AUD to stimulate internal growth, increase exports, increase tourism, decrease interest rates etc.
Were it true the worlds central banks had this kind of real power the world might be a financially safer place (or not depending on your point of view). They would certainly like us all to think they are in control but fact is they are all making it up as they go along right now. And the hole is getting ever deeper.
The Australian central bank (rba ) bitched and moaned about an overvalued currency for years but in reality could do very little about it. It was the expectation of rising us rates and falling commodity prices that led to the winding back of the carry trade
( interest rate differentials) that moved our currency.
Just take a look at the recent rate cuts we have had - each time after a quick dip the aud was back to the level before the cut within a day or two.
The same is happening in reverse in the us right now. The fed will try and talk the USD back down but in reality they will be s%&Ģing themselves that this USD rally is already getting out of control and will decimate the fragile us recovery.
The euro has whacked QE into the middle of this bull run on the USD and that's why we have seen such large and quick moves on this cross. I agree it will probably overshoot also as thats what markets do but it is naive to roll out the current
moves another couple times over .
What's our bet walkabout? Dinner on the loser when we meet up in the med next year? If you win it will cost me the equivalent of a Mexican taco and if I win you will still be so far in front on your boat it won't matter - what say you?😁
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