Again last night Glenn Stevens stepped up to the currency war debate and directly threatened intervention in the AUD. As I've posted previously, the RBA will drive the AUD lower and use any means possible to achieve its goals.
I keep reverting back to the AUD which I believe to be a central theme in buying gold stocks and other commodity related stocks on the ASX. It's not all about following the POG in USD!
The link is a hefty read for a Friday morning, but a good one. The pertinent paragraph I've included below for those wishing to avoid a mind numbing lecture on our currency.
The AUD was down 1% overnight and POG up +$14 in AUD.
"Overall, in this episode so far, the Bank has not been convinced that large-scale intervention clearly passed the test of effectiveness versus cost. But that doesn’t mean we will always eschew intervention. In fact we remain open-minded on the issue. Our position has long been, and remains, that foreign exchange intervention can, judiciously used in the right circumstances, be effective and useful. It can’t make up for weaknesses in other policy areas and to be effective it has to reinforce fundamentals, not work against them. Subject to those conditions, it remains part of the toolkit."
