Australia raises interest rate on AUD

[JimboPSM]

Got to admit this was not on my radar and was a bit of a surprise (to me).

From Reserve Bank of Australia:

6 October 2009
At its meeting today, the Reserve Bank Board decided to raise the cash rate by 25 basis points, to 3.25 per cent.

Press release from RBA: http://www.rba.gov.au/MediaReleases/2009/mr-09-23.html

Conventional economic theory would indicate that this should help the strength of the AUD - at least in the short term.

It will be interesting to see if this plays out in practice as the AUD has undergone something of a stellar recovery since the AUD hit its lows of 21 against the THB and 0.6 against the USD last October.

The recovery of the AUD has been quite remarkable and unusual both in its amount and in its speed - which has been almost as fast as its fall (pity the GBP could not do the same).

[BobHelm]

I always wondered why the AUD took such a hammering in the first place Jimbo.
I never thought it was logical.
None of the Aussie Banks were ever involved in the fraudulent roll up loans schemes that crippled the American & UK Banks. Their Banks had an issue in that no-one would lend them money, but that was because no-one had money to lend & not because they were a bad risk. Admittedly house prices fell but this was more because of an artificial lack of credit rather than them being greatly overpriced or bad long term investments.
Little of their export trade is manufacturing, mining is far more important. While the demand for minerals & gas may drop & with it the price. Lower production means there is more material for tomorrow at a better price. It is not 'lost' in the way that reduced manufacturing output is lost.
I think the Aussies had a VERY lucky escape with not selling much of its mining stock to China though. That, in my opinion, would have been a huge mistake. Especially when anyone looks at what is happening in Africa where the Chinese have bough up huge mining rights!!

[JimboPSM]

It surprised me, my perception (rightly or wrongly) of the Australian economy is one which is more dependent on real wealth creation areas such as mining, manufacturing, construction and agriculture rather than the more fashionable (Wall Street) paper shuffling of the US & UK.

I particularly like their combination of manufacturing and agriculture with regard to grapes (which has resulted in some excellent reasonably priced wines).

The UK & the US have exported much of their wealthy creating manufacturing base to Asia in favour of financial services, a substantial proportion of which have been shown to be nothing more than really creative accounting which I, and I think many others now, regard as nothing less than fraud.

Getting back to the AUD, this is one of my monthly charts which shows the AUD/THB from 2001 until September this year - it clearly shows the rapid fall and almost equally rapid recovery.

AUD-THB - 2001M1 to 2009M9.jpg (173.59 KiB) Viewed 1458 times

[wazza]

Oz technically didnt even go into recession which was amazing.

The banks there have much stricter legislation, more fiscal controls etc....

Chinese mining have tried to buy out at the bottom end and also knocked back by the Investment Review Board, Just like Shell trying to buy out Woodside a few years ago.

Mind you the Govts fiscal packages are still in place and thats their strategy etc

Rudd is on an all time high with the ratings even with the current climate.

A good few of my friends back home, still say to me " what recession " not said in a nasty way, but higlights that good jobs are still there and paying well ...

[Kevro]

And of note, the Aussie dollar has been up to 90.5c against US and getting 30.2 baht.

Looking good

Kevro

[wazza]

Aussie Aussie Aussie go go go eh ??

[JimboPSM]

Encouraging sign of recovery from down under - a second interest rate increase in a month.

From the Reserve Bank of Australia:

4 November 2009
At its meeting today, the Board decided to raise the cash rate by 25 basis points to 3.5 per cent

Press release from RBA: http://www.rba.gov.au/MediaReleases/2009/mr-09-25.html

[wazza]

And furthur rises already predicted in the next few months from all the pundits on the ASX

The AUD is still having a nice little run

http://www.news.com.au/business/story/0 ... 37,00.html

[Philrjones]

Yep Wazza, getting some good returns with the Aus/Usd at the moment!

[wazza]

good to hear 4 point pip Phil !

[Aardvark]

There's still talk the Aussie could reach parity with the US$ by xmas, but I can't see it myself

[wazza]

Mr Vark

Only 52 days to go on that.

Was predicted last year also, but some small hicup got in the way, Tink they called it a crisis or something.

Thought the good money is on the AUD to THB for you, with your holiday , lets hope u crack 31.5 !

[JimboPSM]

A hat-trick from the RBA – they just increased the interest rate for the third time in three meetings - by 0.25% from 3.5% to 3.75%.

From Reserve Bank of Australia:

1 December 2009
At its meeting today, the Reserve Bank Board decided to raise the cash rate by 25 basis points, to 3.75 per cent.

Press release from RBA: http://www.rba.gov.au/MediaReleases/2009/mr-09-28.html

There has been an unusually large amount of interest in the lead up to the interest rate decision from the RBA Board meeting.

A Bloomberg survey of economists had 19 out of 20 of them getting it right by expecting a 0.25% rise: http://www.bloomberg.com/apps/news?pid= ... 7gq0&pos=3

This rise should help to reinforce the stellar recovery of the AUD (which had faltered a little over the last few days) – although it is very difficult to see it go on to rise as far as parity with the USD.

The interest of the financial world in Australia and its economy has risen considerably as economists have been speculating that the nature of Australian economy probably makes it one of the better leading indicators of recovery from the recession around the world - time will tell whether they are right or not.

[jackspratt]

Bad news if you have a mortgage.

Good news if you have just finalised it, and have a few bob invested

[wazza]

Extra good news indeed , as i bought a shi* load opf banks stocks Monday at 1000 , on the rebound from the Dubai summary.

Got 4% approx rise yesterday and again today they rallied with CBA standing out for me , he he.

[nevket240]

[quote="wazza"]Extra good news indeed , as i bought a shi* load opf banks stocks Monday at 1000 , on the rebound from the Dubai summary.

Got 4% approx rise yesterday and again today they rallied with CBA standing out for me , he he.[/quote]

Great news. [color=#0000FF]YOUR SHOUT !!! [/color]mali, Guinness please....

regards