Australian Dollar shifting gears

The month of December close to the Holidays is traditionally a time when specialists and floor traders and other major investors take some time off from the markets.

Of course, that doesn’t mean that there aren’t some interesting clues they’re leaving behind on the charts.

There are some intriguing changes in a few markets that I’ll be covering in the days ahead as I assemble a glance at the year ahead (or the next month or so to start).

One I’d like to leave you with today to ponder is the case of the seemingly perpetually bullish Australian Dollar.

Something significant is happening with the Australian Dollar.

A trend and market strategy of generating a ROI of over 3% per month in the cash Australian Dollar has just ended and shifted gears.

This may not be a short-term interruption either.

The second chart on the left shows how strong this change is.

The chart to the left is a weekly chart and also shows signs of weakening prices for the Australian Dollar.

The fundamentals we’ll never really know, but, there has been some talk in some circles of (hard to believe) a shortage of US Dollars in overseas economies causing upward valuation in the US Dollar and weakening non-US currencies at the same time.

The same thing is happening in the British Pound, the Swiss Franc and the Euro among others.

The Euro has really led the parade downward as the chart below testifies:

The non-US currencies are weakening as a group with the Euro leading and now, with the Australian Dollar (one of the strongest throughout this financial crisis) starting to slide too.

Inflation in commodity prices unfortunately continues with the exception of Gasoline and Crude Oil.

Gold, of course, recently has pulled back too, but, the inflationary pressure of the many other commodities has not been offset as yet.

We’ll continue to track the inflationary index and watch these new trends in currencies.

Have an enjoyable weekend. – George

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