We've discussed this offline but for others this is my understanding:
The AUD/US forward rate will *always* be lower than the spot rate.
I say *always" because it's almost always the case that nominal interest rates are higher in Australia than they are in the US. There was I think only one time in the late 90's when the forward rate was higher than the spot rate. This was when the USD interest rate was higher than ours.
I'm a bit rusty, but it essentially relates to Finance Theory (specifically Purchasing Power Parity). Anything other than the above situation at with the status quo would present Tirangular Arbitrage Opportunities between currencies which as we know is impossible.
How's your liver?
PS: I wasn't that surprised by the RBA's decision today.
CER Price at posting:
19.0¢ Sentiment: None Disclosure: Held
