Good On Ya, Australian ETFs
November 5th at 12:02pm by Tom Lydon
Australia’s economy is growing at a substantial rate, putting the market and exchange traded funds (ETFs) on an upward trend. In a few days, the central bank is expected to raise interest rates and this is because of the overall global environment. Tracy Withers for Bloomberg reports that the Reserve Bank of Australia should increase the overnight cash rate target a quarter point to 6.75 on November 7. Core consumer prices jumped during the third quarter and annual inflation exceeds the 3% upper limit of the target.
The country is also in the throes of another election, and increasing rates may not help Prime Minister John Howard’s chance of winning a fifth term in office. Howard’s Liberal-National coalition trails the opposition Labor party according to polls. The November 24 general election is just three weeks away.
iShares MSCI Australia Index (EWA) is up 42.9% year-to-date and CurrencyShares Australian Dollar Trust (FXA) is up 23.3%.
Read the disclosure, as Tom Lydon is a board member of Rydex Investments.
