Posted: June 11th, 2012 | Author: Michael Courtenay | Filed under: News | Tags: Australian Economy, Credit, Debt, Glenn Stevens, Household Spending, RBA, Reserve Bank of Australia | Comments Off
Australia’s Reserve Bank chief, Glenn Stevens says Australians are too pessimistic on the state of the country’s economy, Stevens reckons that we should be much more optimistic over the nations prospects.
Speaking at the American Chamber of Commerce in Australia luncheon in South Australia, Stevens described the nations better than expected growth figures as “quite respectable”. The reserve bank chief said that changes in the world economy present challenges that can easily be overcome.
Stevens said Australia is in a good position to tackle possible world recession sparked by the debt woes facing Europe. He said that economic indicators show that Australia has handled the global financial crisis of 2008 well :: Read the full article »»»»
Posted: June 5th, 2009 | Author: M.Aaron Silverman | Filed under: Business News | Tags: Bank of Japan, Currency, Currency Traders, Reserve Bank of Australia, US Federal Reserve | Comments Off
You can make a buck on the strength of the Australian dollar versus the Japanese yen. When central banks around the world decide to change targets for short-term interest rates, they become a big influence on the flow of funds around the globe, and the resulting changes in the relative value of particular currencies against others.
In the U.S., the Federal Reserve has cut the federal funds target rate down near levels where the Bank of Japan has long kept its primary rate at a measly 0.10%. At the same time, the Reserve Bank of Australia has sustained a higher benchmark rate of 3%.
In the U.S., the Federal Reserve has cut the federal funds target rate down near levels where the Bank of Japan has long kept its primary rate at a measly 0.10%. At the same time, the Reserve Bank of Australia has sustained a higher benchmark rate of 3%.
Imagine if you could borrow money from Japan and deposit it in Australia to capitalize on the rate difference. You can, many do, and it’s called the “carry trade.” When you open a trade on the AUD/JPY currency pair, you are, in effect, borrowing in Japan and lending in Australia.
Traders have already benefited from this trade, as the Australian dollar (AUD), or aussie, has appreciated significantly against the Japanese yen (JPY). The aussie is the base currency and is placed in the numerator position, while the yen is the denominator; this means if the currency pair line rises, the aussie is stronger relative to the yen. Of course, if the yen shows strength relative to the Aussie, the line will fall.
