The AUD decreased 6.4% over September versus the US dollar (USD)

The AUD decreased 6.4% over September versus the US dollar (USD). As quantitative easing nears an end and interest rates in the US begin to normalise, we believe the AUD will continue to break down. Further exacerbating the downward pressure on the AUD is the current over supply in numerous commodity markets, which is also adding downward pressure on the respective commodity prices. We used the low volatility at the beginning of September to buy risk protection via long dated puts on the S&P 500 index. The US market continues to make new highs and as highlighted previously we remain cautious.