The Australian Dollar has lost nearly 1/3 of its value (relative to
the USD) over the last few months, as the credit crisis continues to
drive investors away from areas perceived as risky. In other words, the
best (and perhaps the only reasonable) explanation for its fall has very
little to do with Australian economic
China’s FX Reserves Near $2 Trillion
Wednesday, October 22, 2008
Last week, China revealed that in the most recent quarter, its
economy grew at the slowest pace in nearly five years. It also revealed
that its foreign exchange reserves crossed $1.9 Trillion, due to a
record monthly trade surplus. How can this seeming contradiction in
economic peformance be reconciled? In my opinion, the Chinese economy
will continue to slow as a result of a generalized post-olympics
slowdown and falling
Labels:
Chinese Yuan (RMB)
Credit Crisis could Bring Deflation
Saturday, October 18, 2008
Policymakers are once again uttering the dreaded D-word. Not "depression," but rather "deflation." Food and energy prices have retreated from record highs, and the economic downturn is threatening to crimp demand further. In addition, the deleveraging brought about by the credit crisis has sent asset prices (real estate, stocks) tumbling, and it’s not clear when they will
Labels:
Economic Indicators
Inflation Will Dog the Dollar
Monday, October 13, 2008
That the credit crisis has been kind to the US Dollar is possibly the understatement of the century. In other words, despite the rapid drop in US equity prices and the impending economic recession, the Dollar has gained over 15% against its chief rival, the Euro. The cause of the Dollar bounce is a perception that the US is a safe place to invest during periods of economic
Labels:
Economic Indicators
SA Rand Latest Victim of Credit Crisis
Tuesday, October 7, 2008
Over the last two months, the South African Rand has plummeted,
losing nearly 20% of its value against the US Dollar en route to a
five-year low. It seems the currency has become the latest victim of the
credit crisis and the resulting widespread risk aversion. The sudden
exodus away from the carry trade, for example, has
Labels:
Australian Dollar
Fed is Ahead of the Curve
Monday, October 6, 2008
The rapid and insidious spread of the credit crisis to Europe and even farther afield is catching Central Bankers completely off guard. In fact, they have been forced to rapidly shift gears from fighting inflation to preventing recession. Depending on how you look at it, the Fed was actually ahead of the curve in this regard, having moved to adjust its monetary policy and facilitate
Labels:
Economic Indicators
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