Australia in denial about currency war...

...THE entry of Japan into the global currency war -- a kind of echo of its bombing of Pearl Harbour in December 1941 to enter World War II -- presents a fresh challenge for policymakers everywhere, but especially in Australia......But it's against the Australian dollar that the yen has fallen the most. The Aussie has appreciated 19 per cent against the yen since October but only 3 per cent against the US dollar...(here).



...Australia's economy requires "active management" this year to offset the slowing mining boom and the high value of the Australian dollar, said a board member of the Reserve Bank of Australia, or RBA, in an interview Wednesday.... Heather Ridout, one of nine policy setters on the RBA's board was speaking ahead of the first meeting of the central bank this year scheduled for Feb. 5, when concerns over the persistent strength of the Aussie dollar above parity with the U.S. greenback will again be in focus. Some 1.75 percentage points of rate cuts since November 2011 have failed to ease ...(here).

Canada's Banks downgraded, Australia's are next!

Australia's banking sector has regularly been compared to Canada's banks, but this comparison is likely to sit uncomfortably following the surprise credit rating downgrade over the bulk of the Canadian sector early on Tuesday..... (more here).

Moody's Investors Service Inc. downgraded six of Canada's largest banks, citing concern about high consumer-debt levels and elevated house prices......Canada's banks are still among the world's most highly rated, tied with Australia in second place behind Singapore, Mr. Beattie said. (here)