Aussie dollar falling

Carlosd

It's not the us that is pulling the australian dollar down. It is a combination of interest rates coming down (making the aussi dollar a less attractive investment), further rate cut fears, poor unemployment numbers, worst in 10 years just out

Aussi may bounce up a little as some of the fall may be an overreaction to the poor employment data but that's anyone's guess.

Timistry wrote: »

I have all of my saving in Oz. A busy schedule over the last year doing FIFO means that the historic high exchange rates (80c+) have come and gone now and I have lost alot of $$$/euro, in relative terms but not in long term average terms...

The exchange rate recovered to circa 66c during the week but now it has fallen back down to circa 64c today. A few questions:

Why is the Oz$ linked so strongly to the US$? They are not their biggest trading partner etc so it makes no sense to me. Talks of further US tapering next week is more bad news.

Euro stocks are on the up now and confidence is growing in Germany, the UK and Ireland(Moodys upgrade etc). but due to the US link, this appears to be making no difference!

The aim of me being in Oz on my own is to build a future for myself (and future family) in Ireland. However, this is being eroded by the currency exchange rates. I have invested in high interest accounts etc to maximise my savings and hedge, but what other advice can ye give?

catbear

Timistry wrote: »

Why is the Oz$ linked so strongly to the US$? They are not their biggest trading partner etc so it makes no sense to me. Talks of further US tapering next week is more bad news.

Why did the Aus$ get so strong against everyone else in the first place?


China has become Australia's most important trading partner and as the rest of the world devalued their currencies the Aus$ was buoyed by the Chinese switch from export driven growth to structural investment which meant loads of Iron ore and coking coal exports. So while the rest of the world was writhing in the grip of recession Australia was going gangbusters meeting the needs of China's command driven economy.


Investing in Australian stocks was one way of making money from that Chinese structural investment, so the Aus$ got a huge uplift from international funds looking for a return in a recessional world with fewer options. As the world recovers then money will have more options than Australia.

As you can see from the second graph Australian manufacturing has contracted while mining has soared, this has made the Australian economy more dependent on one export and one customer than it has ever been before. Any contraction in commodity demand could knock the Aus$ down another chunk.

And Australia isn't the only country vulnerable to a slowdown in China.


Anyway, it's 39c outside and as soon as the worst has passed I'm off to the beach. What we may lose in currency we have certainly gained in sun!

the flananator

Dollar has hit a 3 year low, down to .63

Further drops seem likely now. Wonder where it will be in a year's time.

Timistry

the flananator wrote: »

Dollar has hit a 3 year low, down to .63

Further drops seem likely now. Wonder where it will be in a year's time.

So where do we go from here? Obviously the boat was been well and truly missed (possibly sank ha ha) but how do you hedge against these drops? High interest saving schemes, shares, materials?? Any advice would be greatly appreciated. PM if necessary. Thanks

the flananator

Timistry wrote: »

So where do we go from here? Obviously the boat was been well and truly missed (possibly sank ha ha) but how do you hedge against these drops? High interest saving schemes, shares, materials?? Any advice would be greatly appreciated. PM if necessary. Thanks

Haven't a clue I'm afraid! From what I'm reading further drops are likely in the medium to short term, but where the markets will be in say a year from now is anyone's guess.

EDIT: Dollar now back comfortably over .64 after positive news regarding business conditions in December.

colman1212

the flananator wrote: »

Dollar has hit a 3 year low, down to .63

Further drops seem likely now. Wonder where it will be in a year's time.

Back up to .66 this morning. Good to see! it really is jumping all over the place at the moment.

commited

RBA announcement seems to have really changed sentiment towards the AUD, I've read in a couple of places that it's considering pretty oversold at this stage. Don't expect any superhuman jumps though!

The ECB announcement on Thursday may have a further positive impact.

Legend100

commited wrote: »

RBA announcement seems to have really changed sentiment towards the AUD, I've read in a couple of places that it's considering pretty oversold at this stage. Don't expect any superhuman jumps though!

The ECB announcement on Thursday may have a further positive impact.

of course didnt I send money home on monday :mad:

res ipsa

Legend100 wrote: »

of course didnt I send money home on monday :mad:

I transferred on tuesday & am now back in the market for a while. Make of that what you will. Spring bounce.

commited

[selfish]Pity the ECB didn't cut the interest rate[/selfish] but the RBA monetary comments being positive has been a great plus. To be honest, at this stage, happy if it stays around 0.66 for a while.

JONJO THE MISER

The aussie dollar for years was at 1 Eur to $1.80, went as high as 2.20 for a few months in 09.

the flananator

Jesus they can't decide what the value of the Dollar should be. Its total guess work. Getting really sick of the situation now.

http://www.smh.com.au/business/markets/imf-off-the-mark-on-aussie-dollar-say-local-economists-20140213-32krx.html

GiftofGab

I got my superannuation cheque a while ago in the post. I'm back in Ireland now. The cheque is in AUD$. You guys think I should cash it in now or hold off for a week or two to see if the Dollar falls??

AngryHippie

flip a coin.

Mad4simmental

Is there much involved with getting the super back? I'll be doing it soon, have about $15 k but I was told they take %40 is that right? Thanks

commited

Mad4simmental wrote: »

Is there much involved with getting the super back? I'll be doing it soon, have about $15 k but I was told they take %40 is that right? Thanks

I haven't done it myself but it doesn't appear to be difficult, all the information you need is here:
http://www.ato.gov.au/Individuals/Super/In-detail/Temporary-residents/Super-information-for-temporary-residents-departing-Australia/

They deduct 35%, so after the 15% tax at source when originally paid, works out at a net 44.75% tax.

Mad4simmental

commited wrote: »

I haven't done it myself but it doesn't appear to be difficult, all the information you need is here:
http://www.ato.gov.au/Individuals/Super/In-detail/Temporary-residents/Super-information-for-temporary-residents-departing-Australia/

They deduct 35%, so after the 15% tax at source when originally paid, works out at a net 44.75% tax.

Thanks

Aemtler

Another report suggesting that the Aussie dollar may fall further


http://www.brisbanetimes.com.au/business/markets/currencies/fears-australian-dollar-facing-benign-collapse-to-us66-20140224-33cfl.html

res ipsa

Aemtler wrote: »

Another report suggesting that the Aussie dollar may fall further


http://www.brisbanetimes.com.au/business/markets/currencies/fears-australian-dollar-facing-benign-collapse-to-us66-20140224-33cfl.html

Chinese Yuan has fallen in the last few weeks. Proxy for the Aussie ?

catbear

res ipsa wrote: »

Chinese Yuan has fallen in the last few weeks. Proxy for the Aussie ?

I thought it was the other way around, the Aus$ being the proxy for the Yuan as it's hard to invest directly into China. We wait and see what comes of it.

catbear

Dollar is strengthening against Euro, for how much longer who knows but worth watching if you've got a large amount to convert.

NorfolkEnchants

Not a massive strengthening as yet but I agree it's worth keeping an eye on. I have been wondering if the threat of instability on the eastern side of Europe would have an effect, but it has not really as yet (not that I'm hoping for an escalation that side or anything).

Legend100

been watching alright the past few days, may be worth sending some home now

also just an fyi - Got an email a few weeks back from currencyfair saying their bank details have changed if anyone didnt see it and intends capitalising on the rate change and sends money home quickly (for those who use currencyfair)

massdebater

Yeah, looks to have strengthened in the past few weeks. Of course, I transferred some of my savings back to Ireland two weeks ago to hedge my bets a bit. Would have an extra €400 if I had waited til now, feck sake :mad:

colman1212

Yeah I thought they said they wanted to keep the aussie dollar under 90c against the US. Seems to be shooting up the last week or so. Would love for it to hit the 70c mark against the euro.

Legend100

0.6656 as I type.....up up she goes hopefully!

colman1212

0.6701 going strong.

massdebater

Ah jayses, I really need to unfollow this thread! :P

If it gets to 0.70, I'm transferring the rest of my savings back to EUR

the flananator

Moved a grand home when it hit .66, then another when it hit .67. If it hits .7, its all coming home!

purcela

0.6707 now. Slowly creeping up.