The Australian dollar safe haven garbage just keeps coming, mostly from Dumbfax:
The Australian dollar is proving resilient to the threat of a downgrade of the nation’s triple-A credit rating.
Just after 1pm on Friday, the currency was trading at US75.03¢, little moved from US74.99¢ on Thursday.
OANDA Australia and Asia Pacific senior trader Stephen Innes says Thursday’s downgrade of the outlook on Australia’s sovereign credit rating has not caused any real currency shock waves.
“While I expect the yield appeal to keep the Aussie buoyant as the dust settles on the Brexit fallout, the rating agency credit woes are smouldering,” he said.
And again:
The Australian dollar has been unflinching in the chaos of Brexit and was untroubled by Standard & Poor’s putting the sovereign AAA rating on notice for a downgrade.
Right now, global investors perceive Australia to be immune to the problems looming for Europe, and the Reserve Bank of Australia has not joined the bigger central banks in negative interest rates territory.
No. Here is the Aussie versus the global basket of commodity currencies since the current dirt bear market rally began late January:
The Aussie has seen the weakest rebound of all commodity currencies on every measure and by considerable margins. The Australian dollar has benefited from a global shift to buying dirt as the US dollar has weakened along with the US tightening cycle but within that context its relative position is eroding quite swiftly.
That is the good news story here, not that it is holding up well. Quite the opposite.
