Most CR Capital clients have positions in the Aussie Dollar. The carry trade out of 20 basis point dollar into high yield cash opf 3.65  in Aussies is a smart play. It also appears that the currency will hold parity or evaluate even more against the USD. Again, we do not speculate in currencies but hedge them against eachother to protect the value of cash that is sitting on the sidelines.  It is still nice to have the extra income though.  FT, Australia’s central bank underlined its determination to reduce monetary stimulus on Tuesday when it lifted its benchmark interest rate from 4 to 4.25 per cent, its fifth such rise since October. In an upbeat assessment of the country’s outlook, the Reserve Bank of Australia indicated growth this year would be around a trend of 3.25 to 3.5 per cent and inflation during the same period would be close to its 2 to 3 per cent target range. ”The board judges that, with growth likely to be around trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average. Today’s decision is a further step in that process,” the central bank said in a statement. It also pointed to a boost in the terms of trade following increases in iron ore and coal prices. This should be good news for the Australian dollar.

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