insto - Australian financial markets

While monetary policy decisions taken in Washington can still influence emerging markets, their future growth may not be driven by the US economy, write Richard Yetsenga* and David Bloom*.

The startling race towards parity by the Australian dollar against the US dollar demonstrates the importance of commodity prices on currency rates, writes Bernard Kellerman.

By mid-October, the AUD/USD rate had climbed to a 14 and a half month high - somewhere above 0.9300. This meant the AUD had risen by more than US5 cents since the RBA first raised official interest rates by 25bps on October 6.

While monetary policy decisions taken in Washington can still influence emerging markets, their future growth may not be driven by the US economy, write Richard Yetsenga* and David Bloom*.

Investec Asset Management's chief investment strategist, Michael Power, spoke to Insto about gold, the rise of the renminbi and the formation of an Asian bond market.

Insto: You've had a lot to say on commodities, especially gold. What's your view on the outlook for gold in the near to medium term?

The New Zealand Prime Minister, John Keys, an ex-head of FX for Merrill Lynch in London, was thrown an easy pass with the line wide open at a recent Trans-Tasman Business Circle lunch. MC and ex-Premier of NSW Neville Wran asked him this question: Will you please comment on the concept of a common currency or, if not that, then currencies that are pegged together?

The findings in a study by ratings agency Standard & Poor's show that managers have fully hedged any foreign currency exposure within the global fixed-interest and global-property components of their funds. Given that regular income makes up a significant portion of the total return for these asset classes, S&P said it considers this approach to be "sensible".