In his speech
in Hong Kong on Wednesday Reserve Bank Governor Glenn Stevens said the Aussie
Dollar was still too high but then went on to say. “We are going to have a boom
in residential construction over the next couple of years that is very much on
track.” Stevens also said. "Our assumption is that the terms of trade will
fall further. We think commodity prices will be softer from where they have
been in the past." He then added. “It will be quite a surprise if
that comes to pass if the Australian dollar doesn’t depreciate along with
that." Meaning that if commodity prices fall, so should the Aussie
Dollar.
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Russian President Putin soothed financial markets
Tuesday when he said that Russia was not looking to divide Ukraine and
take more control of the country. Putin stood in front of the Russian
Parliament and approved Crimea becoming part of Russia after 97% of the
Crimean population unanimously voted to become part of Russia. The US and
European Union consider the referendum and any attempt at making Crimea
part of Russia illegal and will try to enforce sanctions but at this point
there seems to be no threat to financial markets. The US and EU will need
to be careful that any sanctions they put in place doesn't inadvertently
affect Europe as it struggles to get growth and jobs going again. The US
and the EU are snookered somewhat and their ability to put real pressure
on this situation seems weak at present but rest assured the US won't walk
away from this without some sort of fight. Not a physical one but they
won't let this rest I guarantee it. You just wait; this will heat up again
very soon.
LTG GoldRock Reviews the latest Forex News on www.ltggoldrock.tv
Day
#3 was another sensational day on the mountain and it was AB's turn to present
something to the group in our afternoon training session. Some of the members
here with us told me that they wanted something that was very process driven
and was independent from the Order Sheets. I asked if they were familiar with
Waves and everyone said yes so I simply showed them how I like to look for
longer term trades on the Daily chart using Waves and the 200 moving average.
Currently Andrew Barnett and the LTG GoldRock Team are in Niseko Japan, at a week long Ultimate Trading & Lifestyle Event. Keep up to date on http://www.facebook.com/ltggoldrock
There has been
a steady increase in concern throughout 2014 surrounding China's shadow banking
system and that loan defaults are inevitable with some leading analysts even
suggesting a Lehman Brothers type default is possible. Lehman Brothers was the
investment bank that triggered off the global financial crisis in 2008 when
there was a credit freeze and the Aussie Dollar fell to 0.60c. Simply put this
was when banks declined to lend to one another because they no longer trusted
the other bank to pay back the loan.
Recently the
People’s Bank of China (PBOC) has stepped in when there has been a cash crisis
between banks and bailed out these smaller shadow banks and avoided further
contagion or credit freezes. Some major US Hedge Funds and investment banks are
suggesting that an official default by one of these shadow banks is only just
around the corner and the PBOC may elect to use one of the potential defaults
as a signal that they will not openly bail out every bank when its money flows
dry up.
The Weekend
Edition of the AFR suggested that China Credit Trust could be the first with
its head on the chopping block with a $25 Million dollar loan due in May. This
seems like chicken feed in comparison to the Billions that were lost when
Lehman Brothers went belly up but it’s the coal mines throughout China with
substantially higher loans due in the coming months that may create a tipping
point and the credit freeze the market fears. If a default was to happen
and this now looks likely this most certainly would put downward pressure on the
Aussie Dollar.
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