...The Australian dollar has leapt almost 2 US cents after Federal Reserve boss Ben Bernanke said the central bank was not going to turn off its supply of easy money for the recovering US economy.
The local currency took flight on the comments, beginning a gain from 91.2 US cents at 6.45am to 92.97 US cents shoirtly before 9am. Earlier the Aussie was threatening to fall below 91 US cents.
Speaking at a conference in Cambridge, Massachusetts, Mr Bernanke also warned that the full impact on the economy of steep government spending cuts initiated in March was yet to be seen, underscoring the need for more Fed support.
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"The overall message is accommodation," Mr Bernanke said. He
said that a "highly accommodative policy is needed for the forseeable
future."...Bernanke is going to continue to print money. The USA GDP does not prop up the value of the USA dollar to be printed in these numbers. The dollar is going to lose value if this continues. The economic growth is not there to justify Bernanke's free for all.
...The Australian dollar has strengthened quite substantially, and it's been directly related to the US dollar," ANZ currency strategist Andrew Salter said.
"The US dollar has weakened substantially following [US Fed chairman Ben Bernanke] Q&A and a speech, and also following the release of the Fed minutes."...
This is my take. The reason the USA dollar has produced a high value yield is because the recovery globally has been slower. That does not mean the USA dollar will sustain continued exploitation by printing more money. When the other economies begin to cover at a faster rate than the USA, the US Dollar will plummet. When the import dense USA loses value on it's dollar inflation will result. The USA dollar will start to purchase less from other economies as they recover. The purchase of the Aussie Dollar is a direct reflection of that reality.
Bernanke needs to close out these quantitative easing programs. It is borrowing against the future. It was a hedge against economic slowing, but, there has to be an end to allow the currencies to stop their fluid movement. The US Dollar will lose value. The GDP does not justify the continuation of these programs.
