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tabasco · 02-27-2008, 02:58 PM

I want to cry...

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"The Australian dollar rose to the highest in 23 years on speculation the central bank will raise interest rates next month to slow inflation, widening the nation's yield advantage over the US.

Australia's dollar is the best performer among the 16 most- active major currencies in the past month as the central bank this month increased borrowing costs to an 11-year high of 7%. By contrast, traders are betting the Federal Reserve will cut rates in March as reports show US home prices and consumer confidence fell.

The Australian dollar rose as high as 94.34 US cents at 7.50am in Sydney, the most since March 1984. It recently traded at 94.27 US cents.

''The Australian dollar is one of our favored picks,'' said Sue Trinh, a currency strategist at RBC Capital Markets in Sydney. It's also ''an environment that's slanted toward US dollar weakness.''

The Reserve Bank of Australia will probably raise its benchmark interest rate by a quarter-percentage point next week to 7.25%, according to all but 2 of 24 economists surveyed by Bloomberg News. That would increase the nation's interest-rate premium over the US to the most since July 2004.

The RBA lifted rates earlier this month to slow inflation while the Fed slashed its benchmark in January by 1.25 percentage points to stave off a recession led by a housing slump.

Fed funds futures on the Chicago Board of Trade indicate a 86% chance policy makers will reduce the target rate for overnight lending between banks by a half point to 2.5% at their next meeting in March."

02-27-2008, 02:58 PM
tabasco Confirmed User Industry Role: Join Date: Jul 2006 Location: In a van down by the river Posts: 2,624	Australian dollar hits 23 year high I want to cry... --- "The Australian dollar rose to the highest in 23 years on speculation the central bank will raise interest rates next month to slow inflation, widening the nation's yield advantage over the US. Australia's dollar is the best performer among the 16 most- active major currencies in the past month as the central bank this month increased borrowing costs to an 11-year high of 7%. By contrast, traders are betting the Federal Reserve will cut rates in March as reports show US home prices and consumer confidence fell. The Australian dollar rose as high as 94.34 US cents at 7.50am in Sydney, the most since March 1984. It recently traded at 94.27 US cents. ''The Australian dollar is one of our favored picks,'' said Sue Trinh, a currency strategist at RBC Capital Markets in Sydney. It's also ''an environment that's slanted toward US dollar weakness.'' The Reserve Bank of Australia will probably raise its benchmark interest rate by a quarter-percentage point next week to 7.25%, according to all but 2 of 24 economists surveyed by Bloomberg News. That would increase the nation's interest-rate premium over the US to the most since July 2004. The RBA lifted rates earlier this month to slow inflation while the Fed slashed its benchmark in January by 1.25 percentage points to stave off a recession led by a housing slump. Fed funds futures on the Chicago Board of Trade indicate a 86% chance policy makers will reduce the target rate for overnight lending between banks by a half point to 2.5% at their next meeting in March." __________________ "There is no other way to see a thing except to look at it" - fatfoo