While you were watching… Chile v Australia, 13th June 2014

June 16, 2014

Chile v Australia, 13 June 2014

Australia and Chile’s last match up

The last time Australia and Chile faced each other in the World Cup was 40 years ago and we drew nil all against the South American team. This was probably the best result the current Socceroos could have hoped for against the eight time FIFA World Cup players, who also saw their best ever lead up of results in this year’s Cup qualifiers. Nevertheless, in true Australian spirit, the nation backed and supported their underdog team in droves.

 

Australian Golden Habits

What happens to a nation’s currency during such momentous rallying? It has been well documented that there is a strong relationship between the Australian dollar and gold – not just simply the tradeable commodity but also in gold medals. During the 2012 London Olympics, ANZ economist Warren Hogan and currency strategist Andrew Salter released a research note suggesting there was a strong inverse correlation between the Australian Dollar and Australia’s Olympic medal tally. Looking at historical data, they found that a high performing AUD saw a less successful national sporting team¹.

Olympic gold AUD Forex relationship | MXT GlobalChart courtesy of ANZ

 

It seems that the Socceroo’s loss at the World Cup also follows this inverse trend. With each international event, the AUD continues to climb and with it less Olympic medals and lower finishing ranks at the World Cup. With the AUD at a higher position than last World Cup and Australia facing some of the toughest teams in this group, it looks like this trend will be continuing.

AUDUSD and Aussie Performance from 2004 -2014AUDUSD (Vantage FX MT4) and Aussie Performance from 2004 -2014. Click to see full view.

 

All in all, a light look at our prospects in the Cup paralleling the Socceroos going in with little hope up against the strong Chilean team. Australian attacking midfielder Tommy Oar had said that this was a less pressured game for them: “The way expectation will be on them (the Chileans), they know that if they don’t get a good result against us, their backs will be against the wall. For us, we can go into the game with a lot of confidence and really take it to them.2” Overall, a great fight from the Australian side.

 
1. The Australian/ Wall Street Journal, July 2012
2. FIFA.com, June 2014


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