Chart of the day: Aussie Dollar

If the huge sell-off on Wall Street, the gaping up of LIBOR, the halt of credit liquidity everywhere, the nationalisation of financial institutions and the enormous TED spread are not enough to convince you that we are headed for a deflationary world, then the sell off in commodity currencies should!

Just two months ago, mining giant Rio Tinto’s CEO Tom Albanese said:

“There is no question that we are living in an era of unprecedented demand for minerals and metals.”

Well, look at this chart of the Australian dollar.

A move of this size in a few days is unheard of. The Australian Dollar has absolutely collapsed. The same goes for the South African Rand, another commodity currency (see data). I think the market is telling us something… and it’s not demand for commodities through the roof.

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Sources
U.S. Dollar – Australian Dollar cross – Exchange-Rates.org
Chinese skyscraper builders to put up equivalent of 10 New Yorks, says Rio Tinto – Guardian
Rio Tinto expects post-Olympic Chinese boom – Times Online
David Prosser’s Outlook: That 20-year commodities super-cycle is in need of a puncture repair kit – Independent