daytraders, page-8

Guess most are blind .

The miners are huge beneficiaries of a lower dollar, the old saying that a US$0.01 drop in the Aussie boosted BHP's revenues by $100 million. BHP Billiton does its accounts in US dollars nowadays, but Australian-based shareholders receive the benefit of a lower dollar when they get their dividend cheques.

The value of the dollar has doubled since it hit its low of US$0.48 in 2001 (speculators for some reason sold the Australian dollar down further than the US dollar after September 11) and has bounced around quite a lot in the meantime. It is a volatile currency and is liked by the speculators because it is a deeply traded currency (the sixth most traded after the US dollar, euro, sterling, Japan's yen and Swiss franc), but not so heavily traded it can't be moved.

So what is the Australian dollar worth? The currency and the economy seem to do well when it is trading in the low to mid-US$0.70 range. In this range (US$0.70-0.75) it seems to strike good balance between being strong enough so that oil and other imports do not have a material impact on the economy and prices, yet cheap enough to make Australian commodities competitive on world markets and return good profits in Australian dollars.

*Mark Westfield is a Director of C|T Financial and a financial commentator.