Posted on by ColinTwiggs

Australia at risk as USD rises

NAB are predicting that the RBA will cut rates twice in 2017.

This ties in with the Credit Suisse view: if Donald Trump succeeds in reducing the US trade deficit, it will cause a USD shortage in international markets. And, in Australia, “a USD shortage tends to exert downward pressure on rates, bond yields, the currency and even house prices.”

Macrobusiness joins the dots for us: “a rising USD this year is very bad for commodity prices and national income while being bearish for interest rates and the AUD.”

Source: CS: Australia at risk as USD rises – MacroBusiness

5 Replies to “Australia at risk as USD rises”

  1. ” if Donald Trump succeeds in reducing the US deficit….”

    Well that is a rather substantial question, isn’t it? If he does what he says, it’s going to mean more debt. If he pushes forward with some of the policies we’re seeing in the first few days, he may add substantially to the debt by reducing our competitiveness.

    Still too early to know, but angering our trading partners and neighbors isn’t the way I would have started.

      1. Ah, I see. No worries. Just insert my last sentence! We’ll have to wait and see if we have diplomacy or confrontation. As we see already, people tend to push back against a confrontational style.

  2. Whilst I think that Donald Trump’s style will upset many, I feel we need that type of politician in Australia to smarten things up considerably. We should also be “giving him a go” to see if he can fix the US – there has been to much negativity since his election, and also help with our own economy.

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