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Likely Exchange Rate Fluctuations?

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  • 20-03-2016 3:44pm
    #1
    robman60
    Registered Users Posts: 2,226 ✭✭✭


    I'll be off to Australia in summer time for quite a while and I'm aware the exchange rate has been quite good the last year or so. I've been monitoring it the last while and the euro has been fluctuating between 1.45 and 1.60 ausd in that period. It's around 1.48 currently. I'm worried that ECB quantitative easing is going to worsen the exchange rate over the next couple of months so I'd like to hear what people's opinions are on likely changes in the rate, and reasons why that would be the case.

    Thanks guys.


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    #2
    Suryavarman
    Registered Users Posts: 2,583 ✭✭✭Suryavarman


    The effects of QE would already be factored into the exchange rate. The exchange rate will only make significant changes if something unexpected happens. If the ECB were to engage in a policy referred to as helicopter money (printing money and giving it to normal people) then the Euro would lose value. If exports were to increase sharply then the Euro would strengthen.

    It would only be guesswork on my part to say what direction the exchange rate is going to go. Purchasing the currency over a period of time would probably be the safest option. Perhaps purchasing half now and half just before you go.


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