from Dan Norcini:
Yesterday the Japanese Yen broke “PAR” with the US Dollar, a significant development. Today it is the Australian Dollar or “Aussie” which has now broken par.
I mentioned this currency because of its ties to the commodity sector in general. While it is not an exact relationship, the Australian Dollar as a general rule of thumb tends to perform strongly when commodities are in a rising trend. This is because of the nature of a large part of the Australian economy, which is involved in the production of raw materials. Remember, it was soaring Chinese demand for commodities across the board which helped fan the flames of Australia’s economy and contributed to its growth. With Chinese demand apparently slowing somewhat, Australia is feeling the impact. Just this week the RBA lowered interest rates there and brought about a wave of selling into the currency as a result.
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