The Australian dollar peak looks well and truly in:
The driver of weakness is the plunging yield spread to the USD which hit new wides across the curve last night as lousy Australian wages and confident Fed collided:
The five year spread is approaching record lows. The ten year spread is now at -9bps, its lowest since 1984:
This is a building gale directly into the Australian dollar’s face. Add that China has not even slowed yet, nor bulk commodities corrected, and the downside potential for the AUD/USD later this year is obvious.
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David Llewellyn-Smith is chief strategist at the MB Fund which is currently overweight international equities that will benefit from a weaker AUD so he definitely talking his book. Fund performance is below:
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The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance.
