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AUD getting slammed by LON Traders, POGAUD 1700 here now, page-7

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wombat53

7,702 Posts.

11

17/02/16

10:48

Post #: 17040071
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Originally posted by Windham14 ↑

Wombat,

I understand what you're getting at, however, I don't really see a paradox, at least, not one that makes economic sense.

If the USD weakens then commodities denominated in that currency move higher. This will be a positive for local producers or producers with debt denominated in USD.

However, a strong USD doesn't necessarily preclude strong commodity prices.

Ideally, any producer would want a strong currency as well as healthy output prices. The idea that we need to weaken our currency so that we can sell more of our ''stuff'' makes no sense.

This is not an obvious paradox since it doesn't apply unilaterally to all concerned.

Cheers
Ivan

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OK thanks Ivan...let me think about this.
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0 Great analysis

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