By Tim Seymour
The Central Bank of Brazil increased its interest rate this week for the first time since July 2011. The move is an attempt to keep inflation in check. The central bank is selling currency swaps to help the real from falling too fast while pushing reverse currency swaps to help exports.
I agree with Jim O’Neill. But when commodities were trading at this level last year, AUD was at 0.9800. SELL Aussie if you have been selling everything else that drives this economy (commodities: copper, ore, coal, gold).
The monetary policy element of the AUD bid will erode as they need to loosen up the pressure on their economy.