Australian Dollar Breaks 93 US Cents, Strongest Since August 2008

You have to wonder how bad things are getting when the Australian dollar starts to kick the US Dollar's ass. How long does it take to fly down there?

The Australian dollar briefly rose above 93 U.S. cents as the central bank said it was “possibly imprudent” to keep borrowing costs at a half-century low in minutes of its October meeting. New Zealand’s dollar slipped.  The so-called Aussie traded near its strongest since August 2008 as Reserve Bank of Australia policy makers said keeping rates at “very low levels” for an extended period risks higher inflation. Futures traders are betting on a more than 30 percent chance the benchmark rate will rise another 75 basis points by year-end. Demand for the two South Pacific currencies was trimmed on speculation gains this month have been too rapid.

“The market has taken the RBA minutes as reasonably upbeat, but it’s already there in terms of the rates priced in for year- end,” said Phil Burke, chief foreign-exchange dealer at JPMorgan Chase & Co. in Sydney. “The dips are going to be very shallow because there’s strong underlying sentiment for Aussie dollar, but it’s going to be a slow grind higher.”

SOURCE: Australian Dollar Breaks 93 U.S. Cents on Central Bank Minutes - Bloomberg.com