Kina Continues to Rise

Another week of significant export proceeds with low appetite importer demand as a result of a surging Australian dollar saw the kina rise by 35 points for the week to close at U.S$ 35.90 cents. Westpac have indicated that there are some imminent large importer transactions that need to be settled within the next month so we would expect appreciation of the rate to slow down going forward.

Importers waiting for the Australian dollar to “collapse” against the greenback are being hammered as the Australian dollar breaks through U.S$78 cents. My word to analysts would be to forget about Australian fundamentals and focus on the U.S dollar as text book trading days have been rewritten in the last 10 months. In reality a PGK/AUD 0.4591 exchange rate appears fair value and those waiting for a re-track to 0.4800 may be disappointed.