The AUD has had a good run against the Yen as expected. Although I can see short term delays breaking Y100, I actually believe the AUD is going to return to its previous high of Y108. At this point it will be sold off. The outlook for the AUD is going to remain positive. Strong capital inflows is supporting the market, whilst high oil prices and higher interest rates are helping to curb spending. It doesn't get any better. Higher interest rates is required to curb imports, which paradoxically result in a stronger AUD. At some point (Y108) the traders take their Yen and run though, and the likely reason will be weaker outlook for industrial commodities. Iron ore & coal though look good, so do the agricultural commodities. Inflation remains a problem.Andrew Sheldon www.sheldonthinks.com
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