Gold price, page-4488

Downsyde, it is hard to say what the RBA will do about the dollar in my opinion. I don't think anyone wants it as high as it is yet how do you combat it. I see two more rate cuts in the next 6 to 9 months to try and combat the problem but if you actually drill down into the nitty gritty I am not sure that it is going to make a difference. From the last rate cut banks passed on 0.1% to mortgage holders. and 0.2-0.23% the cut before that (after raising out of cycle) so essentially from the last 2 rate cuts mortgage rates have gone down 0.1-0.15% (not a big deal). Also contra to that the big banks have come out in the last week saying they are facing funding pressure and actually lifted T.D rates in the face of a cut in the cash rate. So when one actually looks at the details, what exactly does a change in the cash rate impact on? Mortgages aren't going lower and banks can't afford for cash returns to go any lower either or they lose their funding. So to me this means the carry trade will continue? Any future cuts will be a token gesture that flows on to neither borrowers or savers? So what in actual fact does it do?

We are reaching close to the upper bounds for the AUD as well, a break out of 78c could see us with an 8 handle. This is far removed from the 6 handle people expected not 6 months ago. Comparatively we are just too strong compared to the rest of the world even though we are weak ourselves. And from the data floating around no one else looks like strengthening into our weakness so are we stuck in a self perpetuating cycle of comparative strength?

I realise none of this really helps. Just my opinion.