When Governor Stevens' jawbone breaks; the fight for a lower currency is on, says Vimal Gor, Head of Income and Fixed Interest
When Governor Stevens' jawbone breaks; the fight for a lower currency is on, says Vimal Gor, Head of Income and Fixed Interest. As most people with any interest in Australian economics know Governor Stevens' jawbone must be getting seriously brawny; with more than two years of talking down the Aussie dollar he's been doing. Unfortunately Stevens is up against strong opponents in the currency wars who won't be swayed by some petty collapse in the iron ore price. They are interested in interest rates and Australia's relative safety as a capital destination. Fixed income investors, particularly from the US and Japan, have created a tsunami of money heading towards our shores against which Stevens is largely powerless. Japan is creating the wall of demand for the Australian dollar, with their primary income account reaching A$15bn in May. Conversely, Australia's account is in deep deficit. How serious? Read more (VIEW LINK)
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