WEEK 5 (From 16/9/04- 22/9/04)
Exchange rates:
Thr:0. 6948
Fri:0. 6986
Tue:0. 6988

OBSERVATION:
I kept losing last couple of weeks and there was no chance that it would turn around the other way and I knew that so I had decided to save as much money as I could. If I could buy I would make some profit again but a was in the position –50 and I decide to buy it all back, because If I would keep selling I would lost everything, I knew that it will go up but it was hard to guess when. Even when I got my first warning in week 4 I ignored it and the same at week 5, it was very obvious it has got the up pattern again. The big role this week was played by oil crises. This is the 4th oil crisis in the history. The surging oil prices had been a bad new for global economy. All of these crises have something in common (1974-75, 1982-83, 1991). All have been preceded by a large increase in oil prices and at the same time tightening the monetary policy by the Federal Reserve, says Deutche Bank commodity analyst Michael Lewis. This influence Aussie dollar as well because US$ is one of the currency of energy exporting countries and when oil prices are rising it strengthened the position of American dollar. Again we can come back to the elections, the interest rate are keeping very steady so the RBA doesn’t influence the campaign. What is going to happen after the elections? J.Howard claims that he will keep the interest rates low, and that if labor party wins the interest rates will go up like previous years. Governor Ian Macfarlane said: ‘First of all lets start the obvious: the federal government does not set the interest rates, The Reserve Bank of Australia does.
DECISION MADE: Buy 50

WEEK 6 (From 23/9/04- 29/9/04)
Final statement
Over all I ended up with profit of $17,007. If I could sell and dollars 2 weeks ago but because I didn’t give myself a very good choice with the closing position –50 I really could not do that much. Either I will keep risking and hoping the Aussie dollar will go down or just stop waste all the money that I accumulated the money that I earned the first 2 weeks. At the time I already new that the Aussie dollar is on the way up and certainly not down. These days Aussie dollar is around .7380, which the opening position for J. Howard old-new government. He was swept back to his position after the weekend’s elections with increased seat in parliament and allowing reform to strengthen the economy.
“Overall, the value of lending to housing remains uncomfortably high for RBA” said Citigroup economist S. Halmarick, although on it’s own he said the data was not an immediate trigger for near- term hike in interest rates. Clearly, it constitutes a long term positive for the currency and asset market said Craig Ferguson, senior currency strategist at ANZ Investment bank. Mr Schuman said the Australian dollar had enjoyed a powerful five US cent rally, from around 69c to almost 74US cents, over the past three and a half weeks. The reserve bank will meet in next few days to discuss the interest rates because number of economists believes that interest rates will increase before Christmas. The A$ closed last week at 0.7273 having started the week at 0.7245. The NZ$ closed last week at 0.6753 having started the week at 0.6784. The Euro closed last week at 1.2410 having started the week at 1.2408. The GBP closed last week at 1.7934 having started the week at 1.7978. US$/JPY closed last week at 109.44 having started the week at 110.40. Even thought it might be sometimes difficult. I certainly think that good research and constant monitoring of the market will give us pretty true picture what is happening in the home and world economy.

The graph shows the movement of the $A during the period of 6 months and some of my decisions were based on these graph. We can clearly see that the pattern it positive with some negative fluctuations.