The AUD has fallen sharply this morning on the back
of a local newspaper article arguing that the RBA is
on the verge of starting its easing cycle.
The world's financial storm has swept through
Australia and New Zealand this week amid mounting
signs of contagion across the Pacific region.
for the full article.
Net flows over the weekend and into Monday have been
light with a fairly clear calendar. There is a week
of heavy data forthcoming, increasing toward the end
of the week. More on that later. Read
Here is a link to a Jim Rogers interview with
Bloomberg that i recommend. Read More...
The larger part of the week saw USD consolidate in a
relatively quiet week until Friday when concerns
emerged over losses at mortgage lenders Fannie Mae
and Freddie Mac may deepen and may eventually have
them nationalized. Treasury Paulson effectively held
firm in his posture that the government is supporting
the Fannie and Freddie in their current state hinting
they would not bail them out. The market views this
as a moral suasion and risk the market does not want
to subject themselves to. Consequently, the USD sold
off to a 35 year low against AUD, JPY and CHF also
moved on risk aversion related to USD only.
Naturally, the USD can't find reason to rally amid
the negative sentiment and data. ADP employment
reported showed -79k contraction in the private job
markets, much worse than expectation of -20k.