FOREIGN EXCHANGE RATES – AUSTRALIA

$A one tweet away from a tumble, says Westpac

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 20 : 9-Jan-17

Modelling by Westpac suggests that the Australian dollar is about eight per cent below "fair value" at present. Westpac’s Robert Rennie warns that the dollar is vulnerable to another sell-off if US president-elect Donald Trump prompts a trade war with China. Meanwhile, Westpac expects commodity prices to fall in 2017. The bank also anticipates that Australia’s cash rate will remain unchanged while there will be two rate rises in the US.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

Wave of uncertainty wipes $30bn

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Original article by David Rogers
The Australian – Page: 21 & 30 : 10-Nov-16

The Australian dollar and the domestic sharemarket fell sharply on 9 November 2016, in response to the election of US presidential candidate Donald Trump. The S&P/ASX 200 reached an intra-day low of 5,052.1 before closing down 1.9 per cent at 5156.6. In the US, S&P 500 futures initially fell by more than five per cent, which resulted in a temporary suspension of trading. Some analysts expect "risk-off" trading to be sustained for some time, while the prospect of an interest rate rise in the US in December appears to have diminished. The Australian dollar reached a low of $US0.758 in local trading, and Westpac’s Robert Rennie says it could fall below $US0.74 in the near-term.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, FTSE 100 INDEX, UNITED STATES. FEDERAL RESERVE BOARD, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, CITIGROUP PTY LTD, HSBC AUSTRALIA HOLDINGS PTY LTD, CAPITAL ECONOMICS LIMITED

Commodities up but $A stuck at US77c

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Original article by Jens Meyer
The Australian Financial Review – Page: 27 : 1-Nov-16

The rally in the price of coking and thermal coal since early August 2016 has bolstered Australia’s terms of trade. However, the Australian dollar has been largely range-bound over this period, and it has not been able to achieve a sustained rise above the $US0.77 level. The currency has not benefited from growing expectations that the Reserve Bank will leave official interest rates on hold in the near-term. Sean Callow of Westpac expects the currency to test the $US0.70 level by the December 2017 quarter.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, UNITED STATES. FEDERAL RESERVE BOARD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF NEW ZEALAND

$A heading to heights of US90c

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Original article by Aaron Patrick
The Australian Financial Review – Page: 27 : 19-Oct-16

Jason Thomas of The Carlyle Group is bullish about the outlook for the Australian dollar. The director of research forecasts that the US dollar will fall by 8-15 per cent over the next five years, as US interest rates are unlikely to rise as quickly as anticipated. Thomas says this in turn will boost the value of the Australian dollar, which could rise to around $US0.85 over the next five years. He adds that the currency could potentially test the $US0.90 level.

CORPORATES
THE CARLYLE GROUP, UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, FEDERAL RESERVE BANK OF CHICAGO, STANDARD AND POOR’S 500 INDEX

Three-week high for $A on new pact

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Original article by Jens Meyer
The Australian Financial Review – Page: 31 : 30-Sep-16

The Australian dollar rose above $US0.77 in early trading on 29 September 2016, reaching a three-week high. The local currency benefited from OPEC’s decision to limit oil production by between 0.7 per cent and 2.2 per cent to a range of 32.5-33.0 million barrels per day. Other commodities have already been rising lately.

CORPORATES
ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, OANDA AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA, RESERVE BANK OF NEW ZEALAND

Dollar hit by prospects of US interest rate hike

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Original article by David Rogers
The Australian – Page: 32 : 30-Aug-16

The Australian dollar fell to a four-week low in local trading on 29 August 2016, at around the $US0.7525 level. The currency was sold down amid indications that the Federal Reserve could increase US interest rates at least once before the end of the year, and potentially in September. A downturn in the spot price of iron ore also weighed on support for the commodity currency, which peaked at $US0.7756 earlier in the month. UBS forecasts that the dollar will test the $US0.70 level by the end of the year.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UBS HOLDINGS PTY LTD, BLOOMBERG LP, RESERVE BANK OF AUSTRALIA, QIC LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Jobs growth makes for murky reading in census aftermath

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Original article by Philip Baker
The Australian Financial Review – Page: 30 : 19-Aug-16

New data from the Australian Bureau of Statistics shows that the economy added 71,600 part-time jobs in July 2016, although it shed 45,000 full-time positions. Currency traders responded positively to the net gain of more than 26,000 jobs, with the Australian dollar peaking at $US0.7720 in local trading on 18 August. However, Kate Hicks of Capital Economics notes that some of the jobs would have been temporary ones associated with the census.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, CAPITAL ECONOMICS LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

Cutting rates to get the $A lower brings risks to the economy

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Original article by Philip Baker
The Australian Financial Review – Page: 28 : 10-Aug-16

The Australian dollar has risen above $US0.76 since the Reserve Bank reduced the cash rate to a record low of 1.5 per cent on 2 August 2016. The currency has benefited from the fact that the local cash rate is still quite high relative to many countries, so further money policy easing may be necessary in order to put sustained downward pressure on the dollar. However, this strategy has economic risks, such as the potential to undermine consumer confidence. Indeed, the ANZ/Roy Morgan consumer confidence rating fell by 2.8 per cent to 114.7 in the first week of August.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ROY MORGAN RESEARCH LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, TD SECURITIES, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Overvalued Aussie dollar could dive below US50c, warns ANZ

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Original article by Mark Mulligan
The Australian Financial Review – Page: 34 : 26-May-16

The Australian dollar is currently trading above $US0.71, but Daniel Been of the ANZ Bank warns that it could potentially test the $US0.50 level. While the currency has shed 35 per cent against its US counterpart over the last five years, Been says its continued resilience can be partly attributed to Australia’s "AAA" credit rating, which has led to the dollar being regarded as a safe-haven currency. He notes that factors such as Australia’s current account deficit and high government debt would not usually result in such strong support for the currency.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, STRATTON STREET CAPITAL LLP, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

Volatile $A could hit US67c as further downside plays out

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Original article by Jessica Sier
The Australian Financial Review – Page: 26 : 10-May-16

Some currency experts have suggested that the recent sharp downturn in the value of the Australian dollar could continue. Mark Walton of BNP Paribas says the currency could fall to around $US0.67 if the Reserve Bank pursues further monetary policy easing. However, Robert Rennie of Westpac says the currency’s sell-off has been "rapid and unexpected", and he adds that it may find support from investors at around the $US0.73 to $US0.735 level.

CORPORATES
BNP PARIBAS SA, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MOODY’S INVESTORS SERVICE INCORPORATED, FITCH RATINGS LIMITED, STANDARD AND POOR’S CORPORATION