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Aussie Leads the Way on Rate Hike Speculation!
By Mike Conlon | September 28, 2009
In a Bloomberg report out today, Australian Central Bank Governor Glenn Stevens announced that “government stimulus spending needs to be eased and that interest rates need to be raised” in light of Australian’s expanding economy. This of course is good news for AUD/USD (+.79%) and GBP/AUD (-1.11%) today as the US dollar is now the “carry trade” vehicle of choice and we’ve already discussed British Pound weakness ad nauseam in the blogs articles below.
This means that investors and traders will be selling USD and buying AUD in order to profit from the interest rate differentials. As long as the Australian economy continues to expand, this will be a profitable trade as they are clearly ahead of the US with regard to having a sound economy which will need to “cool off”.
So keep an eye on Aussie strength and both USD and GBP weakness in the days/weeks to come.
Want to learn how to put on a “carry trade”.? Click here.
Know how to do it already but need some practice? Click here.
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Topics: What To Look At In The Market |