Jun

14

"I love the AUD, it is up more than the S&P" - A DailySpeculations Reader

Below is a table with the Purchasing Power Parity "PPP" for some currencies as calculated by Bloomberg.

The US Dollar is approaching undervalued extremes that (historically) result in global macroeconomic shifts and realignments, and cyclical/secular bottoms. These realignments are beyond the attention span of most so-called professional traders.

So, buying the Australian Dollar at a 35% PPP overvaluation may be profitable for the next hour, but probably not the next decade.

Currency / % Over-Valued

Australian Dollar 34.76 %

Swiss Franc 31.75

New Zealand Dollar 30.53

Danish Krone 23.38

Euro 22.28

Canadian Dollar 18.9

Norwegian Krone 18.25

Japanese Yen 12.96

British Pound 12.31

Swedish Krona 1.07


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2 Comments so far

  1. david on June 14, 2011 9:53 am

    J Rogers is long the $ but admits a roll of Scott’s tissue paper has more value. It’s just a trade. Speaking of purchasing power,
    it’s sad to see the citizens being conditioned to accept high prices, like the frog in the slowly heated water. I heard a woman say just yesterday, “I paid 3.49 for a gallon,down form 3.71.” Lady I recall paying 1.35 two years ago, what has really changed that I have to pay near 3 times more now? You tell me!

  2. JK on June 15, 2011 8:36 am

    To david

    Oil is a non-renewable resource, you must share it(compete) with 7 billion(and more to come) other people, the dollar is constantly inflated etc, ergo oil won`t get any cheaper.

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