You may be interested in the attached news story from AAP which comments to some degree on recent movements in the $A.
It follows on somewhat from my original observations of 12th May where I was suggesting a "short term .... spike to 69, before falling back to near 60 (by mid-July), and then stablising (back) in a 62 -66 trading range".
Since the peak earlier this week, the $A has fallen from a 5-year high of 68.45c, to last night's low of 64.87c. Currently, the $A is trading back up at 65.82 although there are suggestions that it will again touch back against the 64.87c lows, later tonight.
----------------------------------------------------- Downshift of $A still on
11/07/03 16:00
Australia's dollar has travelled both the high and low roads this week, taking a sharp U-turn to end substantially lower.
Market observers had been saying the currency's meteoric rise was likely to be blocked at some stage, but when the blow came it was sharper and quicker than even they expected.
From Monday's five-year high of 68.45 US cents, the Australian dollar sank as low as 64.87 US cents on Thursday - a three-and-a-half US cent fall.
While it bounced off those lows reasonably well to trade above 65 US cents on Friday, analysts are not yet prepared to call the down move over.
The currency closed last week at 68.03 US cents and is set to finish this week around two-and-a-half US cents lower.
But it remains almost 16 per cent higher than where it closed 2002.
The Australian dollar has reached a fork in its route higher. Further gains are still expected but they are likely to be more sedate.
Economists expect the unit to consolidate around current levels, and while it may dip further it can still hit 70 US cents down the track.
Australia's dollar is usually a barometer for global growth in that it rallies in times of economic strength.
However, because the 2003 gains had been based almost exclusively on comparatively high yields in this country, the currency was vulnerable to a downshift whenever United States economic forecasts became less dire.
Australia's dollar had also made substantial gains on the yen this year and a flicker of light in the Japanese economy was enough to make some investors return to base and put money in stocks.
National Australia Bank strategists Greg McKenna and Michael Jansen said the US economy had stopped getting worse but were yet to fulfil the expectations underpinning a rally in that country's equity market.
"We don't believe that the overall outlook for the Australian dollar has changed terribly much in the longer term," they said.
"Wedon't believe, however, that the ultimate (US) economic outcomes are likely to be able to live up to the hype so the period of Australian dollar strength will return in time, just not at the moment."
They also said July weakness in the Australian dollar often followed a strong second quarter performance and was symptomatic of investors reappraising their outlook.
