Print This Article

My Favorite Major Currency

Ashish Advani (July 29, 2009)

Wednesday, July 29, 2009

Where I’m Buying for the Next Six Months…

Also In Today’s Letter…

By Ashish Advani Welcome back mate! For the past week, I’ve been taking you on a world tour to hunt for the real green shoots stories that the greater media haves been missing.

As you must have guessed we are visiting Australia next. From a growth and sparkling economic point of view, this is my second favorite place after India.

The Australian dollar has risen by nearly 16% since the beginning of this year. It is the best performing G10 currency this year. The country has experienced only one quarter of negative GDP growth before it has shown signs of turning around.

It is still early days and we may see another contraction before we see a stable recovery.

But currently China is the economic growth engine backing Australia because Australia is supplying China with all the commodities the country needs to grow. As such, it is hard to believe that we will see too much negativity for too long here.

I see strong recovery and sustained growth in Australia for the next few quarters at the very least, and probably longer still.

China Has $2 Trillion In Reserves to Spend…

Besides the China growth story, there is another major sustained lead that will help the Australia growth story.

One of the senior officials in the Chinese government recently announced that they plan to use the Chinese surplus to acquire “commodity” related companies. They’re also going to bulk up their global commodities supply.

Although there hasn’t been any hard proof yet, I’m convinced that China has begun a campaign to control the global commodities supply in the long run. This is a plan that will last a few years. I liken this to a goldsmith tapping gold a 1,000 times rather than breaking it in one fell swoop.

As China continues to buy commodities, Australia will be right there, waiting to profit. So, I expect Australia and Australian dollar to remain strong for a long time going forward.

Bottom line: This is where I’m buying for the next six months. I suggest you do the same.
Yours in FX Profits,
Ashish Advani

P.S. I recently told our Currency Capitalist members about the easiest, cheapest way to play this wave of optimism in Australia. New members: I still consider this play a best buy. Check out your latest August issue online this weekend, where I outline four more best buys primed for beginning currency investors looking to diversify out of the dollar quickly.