Reserve Bank of Australia Seems Biased Toward More Monetary Easing

(This is an excerpt from an article I originally published on Seeking Alpha on April 3, 2012. Click here to read the entire piece.) In its latest statement on monetary policy, the Reserve Bank of Australia (RBA) dropped more hints that it is likely biased toward further easing of monetary policy and has a preference … Read more

Australia Remains Attractive As RBA Quietly Opens Door to Dropping Rates

(This is an excerpt from an article I originally published on Seeking Alpha. Click here to read the entire piece.) The Australian dollar has fallen so far, so fast over the past month that I failed to notice a major change in tone from the Reserve Bank of Australia (RBA) on monetary policy until now. … Read more

Even Central Banks Are Buying Australian As the RBA Plans Higher Rates

The Reserve Bank of Australia (RBA) released its minutes from its last board meeting, May 3. I reviewed these minutes curious to understand the bank’s expectations for commodity prices given the on-going sell-off in commodities. The meeting occurred just as commodities started their current sell-off, so these pressures were not salient at the time. However, … Read more

No Deflation Fears in Australia

“Commodity prices are off their peaks but those most important for Australia remain at very high levels, and the terms of trade are approaching their peak of two years ago.” – Royal Bank of Australia, “Statement by Glenn Stevens, Governor: Monetary Policy Decision” (July 6, 2010) From Australia’s perspective, the global economy continues to bring … Read more

No More Love for the Australian Dollar

The Australian dollar has been my single source of greatest pain during this market correction. I have long favored the Australian dollar as a play against the U.S. dollar. Even as the U.S. dollar index has rallied over 10% since hitting 16-month lows in November/December, the Australian dollar remained flat during most of that time … Read more

Royal Bank of Australia Causes A Stir With Latest Rate Announcement

The Royal Bank of Australia (RBA) surprised markets by leaving rates unchanged at 3.75%. Forecasts pegged the RBA for another 25 basis point increase. The markets reacted with an instant and steep drop in the Australian dollar against all major currencies. For example, the Australian dollar dropped over 1% against the U.S. dollar. (See chart … Read more