[Nettime-bold] Re: <nettime> A16 digest

["scotartt" <scot@systemx.autonomous.org>]

craig,

yes. wall st goes down, so does the us dollar, the aussie dollar goes up.
wall street recovers, the aussie goes down, which is what the quote says.
[although bear in mind the SMH is not always that economically literate]
and its true, if it can't go up it will go down. expect the currency to be
weak in the short term. but if there's a long term weakness in the us
market, the aussie dollar will benefit. (should be 'benefit' i guess as I
said, a rise in value is bad for some [exporters, short sellers], good for
others [importers, long buyers, those with large debt in US $]).

there are other factors in the relationship, e.g. interest rate
differentials. also, world economy outlook. the weakness in the currency is
uncharacteristic, but a reflection of the changes being wrought by the 'new
economy' and australia's perception by the market of being 'old economy'
[resources, industrials, etc]. although i think this is more an indication
of how little connection with actual economic realities that 'market
perception' usually has. nonetheless, it makes imported cars and foreign
debt more expensive all the same.

scot.


----- Original Message -----
From: Craig Brozefsky <craig@red-bean.com>
To: scotartt <scot@systemx.autonomous.org>
Cc: <nettime-l@bbs.thing.net>
Sent: Friday, April 21, 2000 2:59 AM
Subject: Re: <nettime> A16 digest


> scotartt <scot@systemx.autonomous.org> writes:
>
> > > [ ... ] Australia is a client-state of the US economy. When Wall
Street
> > falls so
> > > does the Aussie dollar.
> >
> > This last sentence is a perfect inversion of the truth. The first
sentence
> > is true for everywhere.
> >
> > When Wall St falls, the value of the aussie dollar goes up, as
investors
> > take their money out of the uncertainty of the stock market and invest
it
> > in 'quality' (ie low risk, low yeild) investments like Government
Bonds.
> > The US dollar usually falls after a stock market scare as money leaves
> > that economy. A low dollar means we earn more from exports, too,
anyway,
> > its not "bad" for the currency to be "low" unless you are living
> > completely off your credit card and like to buy only expensive imported
> > things.
>
> Not content to take your word for it, I did a short bit of research
> and found the following references:
>
>
> http://www.smh.com.au/news/0004/19/business/business04.html
>
>       "Dealers said much of the weakness was due to a recovery in the
>        US dollar, as Wall Street's equity market bounced back on
>        Monday following Friday's 10 per cent drop on the Nasdaq.
>
>        HSBC currency strategist Mr Tony Cripps said: ``The Aussie's
>        weakness is more to do with the US dollar recovering some
>        investor support after being sold earlier in line with the
>        weakness in US sharemarkets.''
>
>        And with the dollar continuing to find the upside blocked, this
>        had opened the way for further near-term declines, dealers
>        said."
>
>
>
>
http://www.oanda.com/cgi-bin/fxgraph/fxgraph?basecurrency=USD&quotecurrency
=AUD
>
>         A charting program which illustrates the relation between the
>         two currencies.  Quite nice.
>
>
> --
> Craig Brozefsky                      <craig@red-bean.com>
> Free Scheme/Lisp Software  http://www.red-bean.com/~craig
> "Hiding like thieves in the night from life, illusions of
> oasis making you look twice.   -- Mos Def and Talib Kweli



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