Bloomberg and a number of
other news outlets are reporting this morning that the Australian government,
in the person of Treasurer Joseph Hockey, has effectively criticized the
Reserve Bank of Australia (RBA) for not doing more to reduce the value of the
Australian dollar on the international Forex markets. The reason for this is
that a relatively strong Aussie makes it more difficult for the government to balance the national budget.
Separately, there are
long-standing talks taking place between China
and Australia
on a free trade agreement between the two countries. This took on a more
prominent aspect during the recent visit of the Australian Prime Minister, Tony
Abbot, to the People’s Republic. Here, expectations of the completion of
negotiations on free trade are delayed considerably by the political hot potato
that is the purchase of Australian property by wealthy Chinese. On numerous
occasions the government has gone so far as to block even the purchase of
individual dwelling houses by Chinese nationals in the cities in Australia where this is most sensitive, such as Sydney . A free trade
agreement with China
would be a major positive for the Aussie dollar, but potential Chinese
involvement in property in Oz is likely to put on the brakes here for some time
to come.
The Japanese Yen (see weekly chart above) has been looking for direction over an extended period. Now, the outcome of the Trans-Pacific Partnership talks have come into focus, as there is to be a meeting between Barack Obama and the Japanese Prime Minister, Shinzo Abe later this week. The US and Japan are the most important participants in the TPP talks and an good outcome would be expected to be favourable for Japanese shares and therefore provide the impetus for a lift in the USDJPY pair, which has been long-awaited. However, once again, politics rears its ugly head, as a major component of the talks concerns Japanese agriculture, the opening up of which is politically sensitive in that country.
The Japanese Yen (see weekly chart above) has been looking for direction over an extended period. Now, the outcome of the Trans-Pacific Partnership talks have come into focus, as there is to be a meeting between Barack Obama and the Japanese Prime Minister, Shinzo Abe later this week. The US and Japan are the most important participants in the TPP talks and an good outcome would be expected to be favourable for Japanese shares and therefore provide the impetus for a lift in the USDJPY pair, which has been long-awaited. However, once again, politics rears its ugly head, as a major component of the talks concerns Japanese agriculture, the opening up of which is politically sensitive in that country.
Gold bias is still down but support exists
While the pressure on Gold is still down, and should remain so as long as the tapering of QE in the
From the Technical Analysis standpoint price is once again approaching an important support level in the 1277 area, and is wresting with the 200 Day Simple Moving Average (SMA) (see chart above).
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