Friday, December 11, 2009

An Inverse Relationship

Story as appears on Business Spectator.

An inverse relationship
TOPIC : Australian dollar

The Australian dollar is affected by the dealings of the US Dollar – an inverse relationship. (See Australian dollar lower at noon, December 9).

So any good news such as improved employment figures, which is good for the USD, would inversely affect the value of the Aussie dollar. Or is the Australian dollar in a trading range between 0.89 and 0.93, consolidating before pushing through the 0.93 barrier?

The next three months will tell if the winds of change are beginning to blow from a more favourable direction. If the American economy is indeed adding ballast to a recovering blow down.

If the US does stabilise recovery, and the US dollar begins to recover in value, I expect to see the Australian dollar stabilise, forget parity. Like a see-saw, the US dollar to Australia dollar will continue to rise and drop to demand and supply. Does the US economy have enough push to continue the rally in the value of the US dollar? Economist appear to differ in opinion to that question.

Angelo Russo 9 Dec 2009 12:40 PM