AUD driven up by bank speculation...and declining USD

There must be a lot big call options on the AUD as it is on a sustained incline. US dollar weakness is persistent as the money pumps are going all out in the US.

AUD/USD parity should hit at some point next year, possibly between January or February 2010. But as the global economy starts to choke on debt (from stimulus fiscal and monetary expansion) banks and institutional investors are pushing the AUD forward on the back (as mentioned) USD weakness and Reserve Bank of Australia interest rates. So the RBA that likes to make money (hell it is a bank) are also steering the AUD upward (even with out interest rates) with talking up recovery and advising that credit expansion for households is ok. Kinda shocking when the RBA deputy governor Ric Battellino said that Australian households appeared to have the capacity "to sustain a relatively high ratio of housing prices to income". As we have learned from the credit markets melting down in 2007 and 2008 central banks have no conception of what credit bubbles are; but it's all business and the RBA has sold (profit taking) some substantial amounts of AUD in the last week or so.

But banks could be straining into 2010 when stimulus falls off and capital requirements set in.

So if you own calls on the AUD there is a lot of support for a parity in 2010