bhp, page-6

I have to disagree with you Jamesdoran. I think resources are a good short at the moment. They have run too far too fast, keeping in mind that their profits have not increased and may not. I would rather be short than long but in any case I am only in for a few days at time and have had a couple of good shorts in the past few weeks.

You can't be too sure that the $A won't keep rising either, counteracting higher commodity prices as they have been. See the following excerp from an AFR article earlier in the week.

Yield gap puts bomb under $A
Author: Robert Guy
Date: 05/11/2003 23:59:00
Words: 629
Publication: Financial Review
Section: Money
Page: 34
Source: AFRBreaking

The Reserve Bank of Australia's decision to raise interest rates put a rocket under the Australian dollar yesterday, with the currency punching through US71y.

Yield-hungry investors swooped on the Australian dollar as the central bank raised the cash rate to 5 per cent from 4.75 per cent, thereby increasing the differential between Australian and US interest rates to 4 per cent, the widest spread in 12 years. The official US interest rate - as measured by the federal funds rate - is 1 per cent.

The Australian dollar was trading at US71.05y yesterday evening, having surged from US70.29y immediately before the announcement flashed on the screen at 9.30am. The currency reached a zenith and six-year high of US71.18y yesterday.

The $A also rallied against the yen and the euro. The $A was fetching y77.9 from y77.3 on Tuesday and was worth y61.84y compared with y61.10y the previous day.

The yawning difference between domestic interest rates and those of other major economies is expected to support the Australian dollar, with many currency market experts anticipating further gains in coming months.