SG, take a look at the reality's here.
AUD rely's heavily on natural resource exports. Fish, grains, METALS, ect. In 2010 the trade surplus for the AUD was positive 10 billion for the year. China was BOOMING in 2010 (their #1 export, and import partner) #2 Japan then U.S, India, EU in some following order. This has now dried up to a large extent. China is slowing down, and Japan is just about in shambles. I will guarantee that the aussies will be running a trade deficit this year. ABSOLUTELY not good for the value of the AUD.
They have no real manufacturing base. Therefore their destiny is not as controlable as that of the U.S. They can not make China buy more iron ore, if it is not needed. But the U.S. on the other hand can make the world want/need our hi tech stuff. Therefore, as long as the U.S. continues to innovate, we will continue to DO BETTER, RELATIVELY SPEAKING.
Unemployment #'s are of no value whatsoever, except that green and red tell the trend on both sides of the A/U trade. 5.5% unemployment in australia tells me nothing, since I do not know how they calculate it. 7.6% in the U.S. tells me lots, even though it is strife with problems, misleading info. and down right deceit. It still gives me the trend. Do not pay to much attention to employment figures. LOTS of other #'s give a better picture.
The fundamentals of the U.S. are not good, but the current, and recent past fundamentals for the AUD are a lot worse at this time.
European hedge funds selling/ driving the price down. Maybe to some extent. ABSOLUTELY no way to prove it tho. But if it becomes to blatent, the central banks will intervene and BLOW ALL of the sellers out of the market. Actually, hedge funds serve a purpose to the central banks by doing their dirty work for them.
Population of AUSTRALIA APPX 23 MILLION.
" " U.S. " 300 MILLION.
Bottom line is that their is no way that the AUD deserves parity, or above parity relative to the U.S. dollar. It will reverse when China and the rest of the world come out of this recession. Not untill. And then we also need to ask IF IT IS GOING TO END.
Agree with everything you said about the EUROPEAN UNION. That is in part, the reason that I entered a position trade today (sell E/U) and yes, it probably is a more reliable money maker than even the A/U sell.
