Showing posts with label Australia. Show all posts
Showing posts with label Australia. Show all posts
Sunday, January 22, 2012
The Australian Dollar as a proxy currency
I think the Australian Dollar can be seen as a proxy or representative currency of all the other currencies of countries in my proposed South Pacific Confederation. Here are the other currencies and their exchange rates:
AUD/USD: 1.0474, UP from .9871 1 year ago
AUD/HKD: 8.129, UP from 7.773 1 year ago
AUD/KRW: 1186.8, UP from 1118.0 1 year ago
AUD/MYR: 3.2529, UP from 3.0471 1 year ago
AUD/NZD: 1.2989, DOWN from 1.3028 1 year ago
AUD/SGD: 1.3327, UP from 1.2701 1 year ago
AUD/TWD: 31.38, UP from 28.9 1 year ago
AUD/XPF: 96.997, UP from 86.88 1 year ago
AUD/USD: 1.0474, UP from .9871 1 year ago
AUD/HKD: 8.129, UP from 7.773 1 year ago
AUD/KRW: 1186.8, UP from 1118.0 1 year ago
AUD/MYR: 3.2529, UP from 3.0471 1 year ago
AUD/NZD: 1.2989, DOWN from 1.3028 1 year ago
AUD/SGD: 1.3327, UP from 1.2701 1 year ago
AUD/TWD: 31.38, UP from 28.9 1 year ago
AUD/XPF: 96.997, UP from 86.88 1 year ago
The South Pacific Confederation
This is my idea for a proposed political and economic alliance in the South Pacific, called the South Pacific Confederation. It is made up of 13 countries and territories which are all highly developed. I have "cherry-picked" the countries, excluding countries and territories which are too large (Indonesia) or too small or too poor (Philippines).
I think of this as the "Australian Empire". It is a region that is connected with the rise of China, but is independent of it.
Countries:
Total GDP(ppp): $4.6 trillion
The political capital is Singapore. The financial capital is Sydney, and the military capital is Honolulu. I exclude Hong Kong because of its tenuous political situation.
The currency used is the Australian dollar (AUD). This is because the Australian economy is the second largest of the group (behind only South Korea), and the AUD is more frequently traded than the won.
I think of this as the "Australian Empire". It is a region that is connected with the rise of China, but is independent of it.
Countries:
- Australia
- Brunei
- French Polynesia (French territory)
- Guam (U.S. territory)
- Hawaii (U.S. state)
- Hong Kong (Chinese S.A.R.)
- Macau (Chinese S.A.R.)
- Malaysia
- New Caledonia (French territory)
- New Zealand
- Singapore
- South Korea
- Taiwan
Total GDP(ppp): $4.6 trillion
The political capital is Singapore. The financial capital is Sydney, and the military capital is Honolulu. I exclude Hong Kong because of its tenuous political situation.
The currency used is the Australian dollar (AUD). This is because the Australian economy is the second largest of the group (behind only South Korea), and the AUD is more frequently traded than the won.
Saturday, January 21, 2012
Could the Australian dollar be a reserve currency?
The Australian dollar is the 5th or 6th most traded currency behind the US dollar, euro, yen, pound and maybe the Swiss franc. Australia has much less debt per person ($12,470) than the countries behind the other currencies.
"The rational reaction of sovereign holders of US dollars who see the writing on the wall (that is, that the value of their US assets is likely to fall) and, furthermore, recognise that we are currently experiencing a major shift in the global centre of economic gravity away from the North Atlantic economies to Asia. ...
And since it is hard to trade the Chinese currency, one of the next best things is a proximate, lowly leveraged, and politically stable economy that has a liquid exchange rate and is highly integrated with the Middle Kingdom's fortunes. Yes, you guessed, it – the Sunburnt Country".
--http://www.switzer.com.au/the-experts/christopher-joye/is-the-aussie-dollar-becoming-a-global-reserve-currency/
"The Australian dollar is attractive to central banks because it has solid public finances, unlike the US, UK, and certain euro zone members. Moreover, Australia is a big exporter of raw materials to several emerging market economies. For these countries, buying the Australia dollar is grabbing a claim on Australia’s bountiful natural resources."
--http://www.ibtimes.com/articles/137346/20110422/australian-dollar-reserve-currency.htm
"in Aussie dollars, gold is worth the same today as it was two years ago"
--http://scottgrannis.blogspot.com/2011/04/central-bank-update-fed-is-behind-curve.html
"The ascent of the Australian dollar has largely been at the expense of the US dollar. America has been flooding global financial markets with US dollars, thereby reducing its value. It is part of a last ditch attempt to stimulate markets by providing easy money.
The chief currency strategist at Westpac Robert Rennie blames the US Federal Reserve for pumping so many extra US dollars into the global financial system. "The ultimate source of this liquidity really is the Fed. As the Fed increases the size of its balance sheet and pumps money into the US economy and the global financial system, one of the areas that it ends up in is in the demand for the Australian dollar," he explained.
Robert Rennie says that has put the Australian dollar front and centre on the international stage."
--http://www.abc.net.au/news/2011-06-20/russian-central-bank-buys-up-aussie-dollars/2764936
"Australia owes its popularity among currency traders to 3 G's – geology, geography and government policy. Geology has given the company a wealth of natural resources that are in high demand, including oil, gold, agricultural products, diamonds, iron ore, uranium, nickel and coal. Geography has positioned the company as a choice trading partner for many fast-growing Asian economies with nearly insatiable resource demands. Government policy has led to fairly stable high interest rates, a stable government and economy, a lack of intervention in the currency markets, and a Western approach to business and the rule of law that has not always been typical in the region."
Read more: http://www.investopedia.com/articles/forex/11/aud-fx-traders-should-know.asp
==============
Update: The AUD/USD is the 4th most traded currency pair.
"The rational reaction of sovereign holders of US dollars who see the writing on the wall (that is, that the value of their US assets is likely to fall) and, furthermore, recognise that we are currently experiencing a major shift in the global centre of economic gravity away from the North Atlantic economies to Asia. ...
And since it is hard to trade the Chinese currency, one of the next best things is a proximate, lowly leveraged, and politically stable economy that has a liquid exchange rate and is highly integrated with the Middle Kingdom's fortunes. Yes, you guessed, it – the Sunburnt Country".
--http://www.switzer.com.au/the-experts/christopher-joye/is-the-aussie-dollar-becoming-a-global-reserve-currency/
"The Australian dollar is attractive to central banks because it has solid public finances, unlike the US, UK, and certain euro zone members. Moreover, Australia is a big exporter of raw materials to several emerging market economies. For these countries, buying the Australia dollar is grabbing a claim on Australia’s bountiful natural resources."
--http://www.ibtimes.com/articles/137346/20110422/australian-dollar-reserve-currency.htm
"in Aussie dollars, gold is worth the same today as it was two years ago"
--http://scottgrannis.blogspot.com/2011/04/central-bank-update-fed-is-behind-curve.html
"The ascent of the Australian dollar has largely been at the expense of the US dollar. America has been flooding global financial markets with US dollars, thereby reducing its value. It is part of a last ditch attempt to stimulate markets by providing easy money.
The chief currency strategist at Westpac Robert Rennie blames the US Federal Reserve for pumping so many extra US dollars into the global financial system. "The ultimate source of this liquidity really is the Fed. As the Fed increases the size of its balance sheet and pumps money into the US economy and the global financial system, one of the areas that it ends up in is in the demand for the Australian dollar," he explained.
Robert Rennie says that has put the Australian dollar front and centre on the international stage."
--http://www.abc.net.au/news/2011-06-20/russian-central-bank-buys-up-aussie-dollars/2764936
"Australia owes its popularity among currency traders to 3 G's – geology, geography and government policy. Geology has given the company a wealth of natural resources that are in high demand, including oil, gold, agricultural products, diamonds, iron ore, uranium, nickel and coal. Geography has positioned the company as a choice trading partner for many fast-growing Asian economies with nearly insatiable resource demands. Government policy has led to fairly stable high interest rates, a stable government and economy, a lack of intervention in the currency markets, and a Western approach to business and the rule of law that has not always been typical in the region."
Read more: http://www.investopedia.com/articles/forex/11/aud-fx-traders-should-know.asp
==============
Update: The AUD/USD is the 4th most traded currency pair.
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