Any thoughts on how high the Aussie Dollar will go? There has been talk of it reaching 1.05

(Last Updated On: April 8, 2011)

Any thoughts on how high the Aussie Dollar will go? There has been talk of it reaching 1.05 and it certainly looks like that is a possibility.

The fundamentals favor further appreciation vs the USD. Having said that, the AUD is frightfully expensive already. I just spent February in Sydney, and I can tell you everything costs a fortune for Americans. There will come a point where the exchange rate will have an inhibitive effect on exports to this country, and more generally abroad. Just not sure what that point is. Till then, I would expect appreciation well past 1.05. Think 1.10-1.15 area is easily possible until the Fed starts showing signs of raising rates. Australian exports are more focused on markets in the Asia Pacific rim, so the USD exchange rate is probably not a major concern in the short-term.

its already reached 1.05!!!!!!! as long as japan gets a free devaluation, and the fed keeps printing it’ll keep going up. and it looks like australia will raise rates before either usa or japan. we may be expensive down here but we balance the books and have 4th biggest pensions savings in the world – for only 21 million people.

yip defiatly looking like it will remain strong in a world or liquidity (courtesy of the Fed and others), perhaps may be running out of puff on this rally tho… getting pretty stretched at the lofty 1.05’s. Dont agree with the comment that RBA should be back on the hike bus, house prices are going to be flat at best this year in Aus, spurious infaltion concerns will be overshadowed by greater concerns about the consumers struggling under the higher rates. RBA is already printing cash to cover up the hole. If we get a real retrenchment in consumer activity the ratings agencies may start to fire shots and the banks and then the great aussie unwind will ensue. but fantastical but stranger things have happened!

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