More on the effects of a currency appreciation this time, here’s a good write-up from a South African newspaper on how the high value of the aussie is affecting the Australian economy.
To sum it up: its exports are more expensive to others, so Australian companies need to be more competitive. If you tune in to the AUD, when you read Australian business news key in on how well Australian businesses are rising to this challenge. The boom will likely to continue for some time, so the ball is in their court.
And though this long term trend looks intact, I feel skiddish about doing much more right now until we see some sort of pull-back and bounce. Be careful, if you’re considering buying the aussie right now ask yourself if it is because you have a great buy signal according to a pre-conceived method, or you are chasing it…
Speaking of, check out the kangaroo boinging between race cars below – whoah! Thanks to our FX director Shawn Howell for this one!
A companion to the Investools FX education 