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Rba Signals Aussie Drop Insufficient To Drive Growth Transition

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The Australian dollar’s 7 percent decline in the past month is insufficient to spur the nation’s transition to domestic drivers of growth, the central bank said today as it kept its benchmark interest rate unchanged.

“The exchange rate has declined recently, in large part reflecting the strengthening U.S. dollar, but remains high by historical standards, particularly given the further declines in key commodity prices in recent months,” Governor Glenn Stevens said in a statement today after a board meeting in Sydney. “It is offering less assistance than would normally be expected in achieving balanced growth in the economy.”

The Reserve Bank of Australia signaled little comfort in the currency’s lower level as it tries to foster demand and avoid a growth gap emerging from a fading resource investment boom. Stevens is also grappling with how to damp property investors speculating in the housing market, encouraged by the record-low 2.5 percent cash rate.

So Cable states the pound is over-valued, the Australian dollar despite declining is still over valued to stimulate growth and every other currency as well is overvalued!

It's like everyone is talking 5h1t.

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France Asks for More ECB Action to Weaken Overvalued Euro

31 Aug


French PM says euro overvalued, urges ECB asset purchases

2 Jul


A common argument for dumping the Euro is that it is overvalued, and that the ECB (European Central Bank) is unwilling to correct this so-called “problem.” This overvaluation is regularly cited as being over 10 percent against the dollar. The Swiss central bank surrendered control of its money supply by fixing its currency at 1.2 against the Euro essentially on the notion that its currency was “overvalued.” Advocates of a Euro breakup consider that a country with its own currency can then follow an independent monetary policy ensuring a competitive exchange rate. Never mind that neither the USA nor Great Britain have improved by following aggressive monetary policies that have depreciated their currencies. Such policies have also forced other countries, such as Brazil, to retaliate. As Mises foresaw,

A general acceptance of the principles of the flexible (exchange rate) standard must therefore result in a race between the nations to outbid one another. At the end of this competition is the complete destruction of all nations’ monetary systems.

The idea that a currency can be overvalued or undervalued comes from the theoretical concept of purchasing power parity (PPP): the idea that the exchange rate should reflect the ability to purchase the same basket of goods in either currency.

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Like a pond full of toads all croaking at the same time with the same chant.

Maybe they have been telling porkies about rebalancing, maybe they are just plain wrong, maybe the mirage of ton of fresh cheap debt, companies with nothing useful (nor profitable) to invest in borrowing more to buy back their own shares is nothing more than a central banker's mirage.

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HA....save us now you Central Bank Frackers!

There is no bottom in a race to the bottom.

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Russia’s central bank sold $420 million of foreign currency in its third day of interventions this month to slow the ruble’s world-beating decline.

And everyone else thinks there's is overvalued....

The comedy of the ruble?

LOL, yet banks in the West all think THEIR currencies are overvalued....Russia is way ahead of the game.

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Russia’s central bank shifted the ruble’s trading band yesterday by the most since March 4 after the fourth intervention this month took the amount spent to defend the currency to $1.85 billion.

The monetary authority sold $442 million on Oct. 7, data on its website show today. That excludes any interventions yesterday as the ruble slid 0.5 percent versus the target dollar-euro basket. The bank said it moved the upper band by 20 kopeks to 44.85 yesterday, a level the currency has since crossed to trade at 44.9498 by 10:41 a.m. in Moscow today. The ruble closed at 40 per dollar for the first time yesterday.


“The central bank’s currency interventions aren’t sufficient to prevent the ruble weakening,” Alexei Egorov, an analyst at OAO Promsvyazbank in Moscow, said by e-mail. “It will continue gradually giving ground, while intervening regularly.”

Reserve Drain

The foreign-currency sales follow a five-month pause in interventions, which drained $40 billion of Russia’s reserves through May. The bank steps into the currency market each time the ruble crosses the upper limit of its trading band, selling $350 million before shifting the boundary by intervals of 5 kopeks.

Russia, which has seen its reserves drop by the equivalent of $55 billion this year to $457 billion last week, is struggling to contain a selloff in its assets as Brent crude slides to a 27-month low and the economy teeters near recession. The ruble has lost 15 percent against the dollar in the past three months, contributing to a worsening of inflation, which reached a three-year high in September.

It would appear Russia still has quite a bit of money to give to the speculators.

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