Currency retreat is 'temporary blip'

Monday 23 August 2010

Article by Mozo

Australians looking to acquire home loans in the near future could be among those to be encouraged by recent claims that country's currency retreat is just a "temporary blip"

Economic uncertainty caused by the inconclusive outcome of the election has led to a dip in the value of the Australian dollar.

However, one expert has described the dip as temporary and said that country's economy remains "robust".

Talking to smartmoney.com, Andrew Barber, strategist at asset management firm Waverly Advisors, said: "The Australian economy remains robust and the fact that its currency has retreated under uncertainty is a temporary blip.

"This may be an opportunity for investors who are in the currency markets since the Australian economy – although it has issues – remains strong and therefore this [uncertainty] is probably an overreaction."

Adrian Ash, head of research at BullionVault.com, told the news provider that Australia could benefit from taking a leaf out of Britain's book after a similar outcome in its recent general election.

"If the Australians can pull together a prudent, government-shrinking coalition as the British did back in May, the Aussie dollar might add fiscal responsibility to its higher-rate, commodity-currency advantages," he added.
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