This thread was started in response to the Article:

Yen's Path of Least Resistance by: Ashraf Laidi
Posted: October 24, 2008 ET
Comments: 14
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Ramesh,

The 37% drop in 4 months has been astounding. In the short term, looks like we may test 57 in the next 2 weeks. The main thing for Aussie to rally is for Fed to slash rates by 75 or 100 bps next weeks, which is doing the rounds nows. 50 bps may not cut it. The big question is the duration of Aussie 's long term selloff which i think could last until early Q1. Stay tuned.

Ashraf

Hello Ashraf Laidi,

I must say your website is very informative. Would you kindly share your insight on the Aussie dollar as it seems to have collapsed to 62 US cents from 95 plus in a mater of 10 weeks. Do you foresee a upward correction over the next 4-6 months. What would you advise to someone who is holding the Aussie. Kind Regards - Ramesh.

Hi Luca, the rebound in gold will happen at the next dosage of central bank rate cuts. As I said in the piece, gold's jump of mid September occured on the rise in fed funds' expectations for rate cuts by the Fed and other cenbanks following Lehman's collapse. As for collective buying of precious metals, it will happen with more confidence once risk aversion trades diminish, the dollar begins to ease and gold leads the way. This would also be a time of stabilization in the yen. Don't forget Indian Wedding Season starts in November, which is supportive for gold.

Ashraf

Fascinating comments, Ashraf, your website is by far one of the most informative. If liquidation and financial meltdown - driven mostly by equity markets - are going to remain with us for quite a while, what would become the trigger for a rebound in precious metals and where would the ammunition be for institutional investors to drive it? I will definitely buy your book, keep the great job !!!