mirage Posted July 29, 2011 Share Posted July 29, 2011 Been on a tear, up 75% against USD since the crisis. China and world economies slowing down. Oz on start of epic housing crash, now hit with retail slump and central bank recently raised rates. Surely they are going to have to lower them again soon? Quote Link to comment Share on other sites More sharing options...
thod Posted July 29, 2011 Share Posted July 29, 2011 The Aussy is highly correlated with gold and other commodity markets. You could short these. Like wise the Canadian dollar. Quote Link to comment Share on other sites More sharing options...
nohpc Posted July 29, 2011 Share Posted July 29, 2011 The Aussy is highly correlated with gold and other commodity markets. You could short these. Like wise the Canadian dollar. So is it wrong that I am long gold mining shares and short the aussie dollar? Quote Link to comment Share on other sites More sharing options...
mirage Posted July 29, 2011 Author Share Posted July 29, 2011 The Aussy is highly correlated with gold and other commodity markets. You could short these. Like wise the Canadian dollar. I'm not sure it's all that correlated with gold. But I'm interested in shorting for the reasons given and I don't think the Ozzy HPC is much going to affect gold or commodity prices. Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 29, 2011 Share Posted July 29, 2011 I'm not sure it's all that correlated with gold. But I'm interested in shorting for the reasons given and I don't think the Ozzy HPC is much going to affect gold or commodity prices. ..their high IRs are a major element for the current strength (weakness?).... Quote Link to comment Share on other sites More sharing options...
Pytyr Posted July 29, 2011 Share Posted July 29, 2011 The Aussie and China are joined at the hip. China will implode, the Aussie will follow. The only question is when. Quote Link to comment Share on other sites More sharing options...
Deckard Posted July 29, 2011 Share Posted July 29, 2011 Ask Bardon. Ooops, he doesn't post here anymore Quote Link to comment Share on other sites More sharing options...
mirage Posted July 29, 2011 Author Share Posted July 29, 2011 ..their high IRs are a major element for the current strength (weakness?).... Why the roll eyes? So you don't think an interest rate slash in response to a credit bubble deflation would dent the dollar? All will be swept before China's great commodity buying spree? Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 29, 2011 Share Posted July 29, 2011 Why the roll eyes? So you don't think an interest rate slash in response to a credit bubble deflation would dent the dollar? All will be swept before China's great commodity buying spree? ...the high IRs are attracting inward investment, making imports cheap and pricing their exports way to high....all leading to a growing bubble ....it's also creating bad debts for people trying to keep up with their mortgage repayments...and the reason the exchange rate is high is because of the high IRs ...is all ah, beh, ceh...lowering interest rates in line with other countries would lower the exchange rate ..... Quote Link to comment Share on other sites More sharing options...
mirage Posted July 29, 2011 Author Share Posted July 29, 2011 ...the high IRs are attracting inward investment, making imports cheap and pricing their exports way to high....all leading to a growing bubble .. You'll have to explain that bubble - are you talking about a hot money flow problem? Australia's bubble is a housing credit bubble caused by too low interest rates. And since when are their export prices too high? They are shifting pretty well. ..it's also creating bad debts for people trying to keep up with their mortgage repayments...and the reason the exchange rate is high is because of the high IRs ...is all ah, beh, ceh...lowering interest rates in line with other countries would lower the exchange rate ..... What are you talking about? Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 29, 2011 Share Posted July 29, 2011 (edited) You'll have to explain that bubble - are you talking about a hot money flow problem? Australia's bubble is a housing credit bubble caused by too low interest rates. And since when are their export prices too high? They are shifting pretty well. ....a surge of inward funds to the Aussie dollar will strengthen that currency while the bubble in the housing market appears to have peaked and falls have appeared in most of the cities Analysts suggest that the Australian economy is suffering a dampening effect partly due to the historically high level of the Australian Dollar, which is making Australian exports less attractive to foreign markets. http://www.currencynews.co.uk/forecast/20110609-553_forex-rates-gbp-aud-nzd.html What are you talking about? ...their current economic status ..cheap imports,expensive exports due to an overvalued currency caused by the high IRs.... p.s. it's a Labour Government ...they love bubbles.... Edited July 29, 2011 by South Lorne Quote Link to comment Share on other sites More sharing options...
mfp123 Posted July 29, 2011 Share Posted July 29, 2011 australia is in a very good position. with fiat being devalued it is tangible commodities that are worth something, and australia has a lot of natural resources. with so much physical assets, they have a lot of actual stuff backing them up. Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 29, 2011 Share Posted July 29, 2011 australia is in a very good position. with fiat being devalued it is tangible commodities that are worth something, and australia has a lot of natural resources. with so much physical assets, they have a lot of actual stuff backing them up. ...Canada is similar ...as long as they both make the right moves on the economic chess board.... Quote Link to comment Share on other sites More sharing options...
scepticus Posted July 29, 2011 Share Posted July 29, 2011 Been on a tear, up 75% against USD since the crisis. China and world economies slowing down. Oz on start of epic housing crash, now hit with retail slump and central bank recently raised rates. Surely they are going to have to lower them again soon? what is your proposed vehicle for this trade? There are many options some might be rather dangerous. However I agree with the fundamentals. Quote Link to comment Share on other sites More sharing options...
longtomsilver Posted July 29, 2011 Share Posted July 29, 2011 Shouldn't this thread be in another category? Investments In General perhaps? If your going short then don't go long in a more fiat currency (£ € $ and ¥ because Japan will never fully recover from Fukushima) go long NOK Quote Link to comment Share on other sites More sharing options...
Harry Sacks Posted July 29, 2011 Share Posted July 29, 2011 My sister lives in Sydney and she said she can't believe how cheap property is in the UK That's how big a bubble they're in. Oh and she's talking about buying in Sydney, "in an area that will go up in value". Oz $ is a screaming short! Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 29, 2011 Share Posted July 29, 2011 Australia's bubble is a housing credit bubble caused by too low interest rates. ....your own link explains: Mortgage holders are grappling with the highest benchmark interest rate in the developed world after RBA governor Glenn Stevens raised the benchmark seven times between October 2009 and November 2010 as he sought to control price pressures from the nation’s biggest mining boom in a century. Quote Link to comment Share on other sites More sharing options...
7clubs Posted July 29, 2011 Share Posted July 29, 2011 I've been screaming to short the major Australian banks for many months. I never thought I'd see the AUD at its current levels against GBP, never mind USD though. It has cost me plenty. Quote Link to comment Share on other sites More sharing options...
scepticus Posted July 29, 2011 Share Posted July 29, 2011 Shouldn't this thread be in another category? Investments In General perhaps? If your going short then don't go long in a more fiat currency The most profitable trade would be to be short AUD and long post-bubble currencies about to start implementing austerity measures. Long gold is dangerous at this point I would say, no-one knows how far from the cliff gold is. Quote Link to comment Share on other sites More sharing options...
7clubs Posted July 29, 2011 Share Posted July 29, 2011 Yes, but tricky market australia. Selling the aussie effectively means selling mining firms, selling commodities, selling a state supported local banking sector, all post flooding and regeneration etc. It’s had a recent lift from higher inflation data increasing talk of another hike. Interest rate markets had been pricing in 25bp cut by year end, now by spring next year. I certainly wouldn't be buying it though. Agreed - a perfect example of how tricky it is to second-guess the markets. Quote Link to comment Share on other sites More sharing options...
aussieboy Posted July 29, 2011 Share Posted July 29, 2011 Been on a tear, up 75% against USD since the crisis. China and world economies slowing down. Oz on start of epic housing crash, now hit with retail slump and central bank recently raised rates. Surely they are going to have to lower them again soon? A retail slump that produced a surprise increase in CPI last week? Rates haven't been raised since November last year. How does all that translate into rate cuts? Quote Link to comment Share on other sites More sharing options...
aussieboy Posted July 29, 2011 Share Posted July 29, 2011 My sister lives in Sydney and she said she can't believe how cheap property is in the UK That's how big a bubble they're in. Oh and she's talking about buying in Sydney, "in an area that will go up in value". Oz $ is a screaming short! If you compate comparable areas of Sydney and London, UK house prices aren't cheap. If you compare country / small town NSW with provincial UK, even with the current ridiculous exhange rate, prices aren't so different. Quote Link to comment Share on other sites More sharing options...
Geek Man Posted July 30, 2011 Share Posted July 30, 2011 Been on a tear, up 75% against USD since the crisis. China and world economies slowing down. Oz on start of epic housing crash, now hit with retail slump and central bank recently raised rates. Surely they are going to have to lower them again soon? How about the shorting the $NZ? This currency has out-performed even the mighty $OZ, despite sustaining two big earthquakes in Christchurch and a disaster taking out one of the bigger coal mines. Unlike OZ, NZ is not especially rich in minerals and just like Britain its (much smaller) oil fields are in decline. Besides timber, wool, meat and most important milk powder (already milk is 20% off peak prices) the main exports are young graduates who head to OZ for higher wages and low taxes. If $OZ is a play on China, and a chance to short the inevitable property collapse and banking crisis that will break there soon, then isn't $NZ even more exposed? It seems to me that small yield differentials have been sufficient to propel the $NZ to quite insane values. Nothing has changed here in 15 years. It is still a backwards economy that rarely adds value to its export and suffers the effects of a tax structure that overwhelmingly favours property speculation over productive assets. Odd. The high currency is hollowing out what was left of manufacturing and at these levels margins are vanishing. Quote Link to comment Share on other sites More sharing options...
guitarman001 Posted July 30, 2011 Share Posted July 30, 2011 Oooh, trading currencies? Very dangerous - I'll bet it has cost you! Saying that, if you get it right, you could be set up for life. Imagine if you shorted the FTSE during teh crash then went long again after - you'd be minted! Which Oz bank has the largest mortgage exposure and can you short it on platforms such as IG Index? I can't find any Oz banks on there - maybe not looking hard enough. Quote Link to comment Share on other sites More sharing options...
Ruffneck Posted July 30, 2011 Share Posted July 30, 2011 How about the shorting the $NZ? This currency has out-performed even the mighty $OZ, despite sustaining two big earthquakes in Christchurch and a disaster taking out one of the bigger coal mines. Unlike OZ, NZ is not especially rich in minerals and just like Britain its (much smaller) oil fields are in decline. Besides timber, wool, meat and most important milk powder (already milk is 20% off peak prices) the main exports are young graduates who head to OZ for higher wages and low taxes. If $OZ is a play on China, and a chance to short the inevitable property collapse and banking crisis that will break there soon, then isn't $NZ even more exposed? It seems to me that small yield differentials have been sufficient to propel the $NZ to quite insane values. Nothing has changed here in 15 years. It is still a backwards economy that rarely adds value to its export and suffers the effects of a tax structure that overwhelmingly favours property speculation over productive assets. Odd. The high currency is hollowing out what was left of manufacturing and at these levels margins are vanishing. Must be the tourism bubble caused by filming the lord of the rings trilogy there thats causing the NZD to skyrocket. Nevermind , we're all in this together and all that. Quote Link to comment Share on other sites More sharing options...
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