Parity looms

[Gob]

The dollar hit a fresh high overnight bringing it closer to parity with the US dollar on renewed speculation that the greenback will continue to weaken in coming days.

The Aussie dollar rose 1 US cent to touch 97.92 US cents in overnight trade, after a weaker jobs report in the US boosted expectations the US Federal Reserve would devalue the US dollar within weeks. The Aussie has since then eased back to trade at 97.75 US cents.

“The Australian dollar continues to trend higher despite stalling in front of 98 US cents,” said New York-based Sean Incremona of 4Cast Ltd economist forecasting group. “Parity between the Australian and US dollars is now back into the equation even after the Reserve Bank failed to come through with a rate hike on Tuesday.”

The Aussie hit a pre-global financial high of 97.98 US cents on July 15, 2008, but 98.5 US cents is considered the next hurdle on its way to parity with the greenback.

Global currency dealers are expecting the US Federal Reserve to fire up its money printing program – known as quantitative easing - in an effort to weaken the US dollar and spur more growth in that fragile economy.

A weak unofficial unemployment reading in the US fuelled the expectation that the Fed would begin a second round of its money printing stimulus, the so-called QEII, in coming weeks.

The ADP employment change for September shed 39,000 jobs, instead of gaining the 18,000 expected by the market.

“All the data originating from the US at present is being viewed by the markets within the context of possible QEII,” said ANZ global markets economist Dylan Eades.

“The US dollar was smashed, with the Australian breaking through the key 97.5 level and looking set to resume its march towards 98.5. QEII is now looking inevitable.”

The Fed embarked on similar measures in the wake of the financial crisis.

Analysts say the next major event for the Australian dollar is the release of official jobs figures today which will give the latest update on the strength of the local economy, shading the RBA’s decisions about a future rate hike.

http://www.smh.com.au/business/dollar-e ... 168dx.html

When Hen first came over to meet with me, her $1 Au would buy her 32 pence. Today $1 Au = 61.5 p UK, nearly double.

I'm shoveling $ Au over to the UK to pay off our mortgage there.

[loCAtek]

You can pay mine too then, 'eh mate ?

[Gob]

$1 Au hit 99c US last night.

Christmas has come early for consumers as the Australian dollar continues its strong run against the greenback, lowering the cost of imports for retailers and making online shopping more attractive.

The dollar set new records when it rose to 99.18 US cents - the highest it has been since its 1983 float - before falling back to 98.25 overnight.

"It's clearly going to be great news for Australian consumers," CommSec equities economist Savanth Sebastian said.

"The stronger dollar will ensure consumers can pick up some bargains in this environment ... from electronic goods to white goods to furniture."

Mr Sebastian said Australians' continued conservative spending habits meant retailers would pass on some of the benefits of cheaper imports to consumers to keep them buying their products.

Shopping online, especially from US websites, has also become more attractive for Australians, and overseas businesses such as international airlines would be able to pass on flight discounts, he said.

http://www.smh.com.au/business/high-aus ... 16b09.html

I'm buying all my books and DVD's from the UK at the moment, nice to give something back to the old country.

We're hoping to go back to the UK for Xmas 2011, if things continue this way we should be able to have a great time without breaking the bank.

[rubato]

Currencies fluctuate.

Its about as inherently interesting as watching a lava lamp.

(Even though our own retirement funds go up when the dollar goes down. But seeing the inevitable happen is not really news.)

yrs,
rubato

[Gob]

Parity!

THE Australian dollar reached parity with the US dollar late last night for the first time since the currency was floated in December 1983.

The Aussie soared as high as $US1.0003 at 23.18 AEDT, before pulling back to stand at US99.14¢ shortly after midnight.

It was also the first time since July 28, 1982, that the Australian dollar has traded above one US dollar.
It follows a week where currency markets took the Aussie dollar within spitting distance of $US1, reaching a 28-year high of US99.94¢, before declining slightly to US99.13¢ earlier yesterday.

Currency analysts had said parity was imminent, and a speech the US Federal Reserve chairman, Ben Bernanke, gave overnight was seen as the catalyst for the jump.

Dr Bernanke, speaking at a conference in Boston, gave his strongest hint to date that the US central bank will step in to help the country’s fledgling economic recovery with more extraordinary measures to prime the economy.

Ahead of next month’s meeting of the Fed’s policy-setting panel, Dr Bernanke set out the case for action, adding the bank was ‘‘prepared to provide additional accommodation if needed to support the economic recovery and to return inflation over time to levels consistent with our mandate.’’


http://www.smh.com.au/business/float-on ... 16njm.html

By ‘‘prepared to provide additional accommodation if needed to support the economic recovery and to return inflation over time to levels consistent with our mandate, ’’ I take it he means "buying up more US debt"..

[rubato]

Parity!...

By ‘‘prepared to provide additional accommodation if needed to support the economic recovery and to return inflation over time to levels consistent with our mandate, ’’ I take it he means "buying up more US debt"..

Good, we have lots!

yrs,
rubato

[Gob]

TRAVELLERS and currency speculators are queueing outside banks and money traders to cash in on a hot-to-trot Australian dollar.

The dollar's surge has driven a fourfold increase in the demand for US notes and coins, while other reserve currencies, such as pounds and euros, are also being snapped up.

Much of the demand is coming from people planning for an overseas holiday, while others are speculators punting that the Aussie there will tumble back to its long-term historical range of about US70¢.
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Late yesterday the dollar was trading at US98.14¢, although this was almost a cent lower from Thursday.

Some smaller banks have had trouble keeping up with the demand, while larger players have undertaken massive logistical exercises to keep suburban branches topped up with millions of dollars of foreign currency.

''It is a massive increase in demand - it's been unprecedented in terms of the volume of customer purchases,'' said the ANZ Bank's head of payments distribution, Peter Tilton.

However, it is not only US notes and coins that are hot property.

Banks such as the Commonwealth and the National Australia Bank have also reported a surge in requests for travel cards, which act like a debit card but can be loaded up with foreign currency.

One bank executive said a customer this week ordered $US30,000 in cash and put more than $US50,000 on travel cards.

The Australian dollar's strength is being driven by a range of factors, from the strength of the economy to surging commodity prices.

But mostly the rise can be put down to a weakness in the value of the other major currencies, led by the United States.

http://www.smh.com.au/business/travelle ... 16xt2.html

Smart thinking! I should buy in some quids now, for our holiday next year.

[rubato]

Every time you buy US debt you make Bush look less stupid!


Nice of you.

Yours,
rubato

[The Hen]

I remember when Australia held the Olympics in 2000. The US dollar would buy two Aus dollars back then.

[Scooter]

So by comparison you are now buying those American goods and services at 50 cents on the dollar.

Remind me again who the stupid ones are?