Crystal Ball needed :)

[Brooke01]

Hi everyone,

Firstly, thanks to all who answered my Iphone query the other week - the phone has been unlocked and I just have to decide what is the best way to travel with it.

Now......

We are travelling to the U.S in mid July - and have been watching the AUD slide against the USD in the past week or so, much to our dismay !

Thankfully all our accomodation etc has been paid already and all we have left to do is get our spending money. I really won't have the cash to purchase our spending money until mid next month - but at a pinch could probably "beg, borrow or steal" for it if I needed to.

The BIG question - thoughts on whether the AUD will rebound alittle against the USD by mid June ?? Or do you think it will continue to slide, slide, slide ! Last time we went to the US, we were getting about .50c - so I was really looking forward to mid .80's.

Any thoughts or opinions - and don't worry, I won't hold you to "gospel" over your views

Thanks,

Brooke

 

[straitman]

Brooke01,

A personal opinion based upon nothing other than a gut feeling is that things should improve a little.

I have been wrong in the past though :!:

 

[Alanslegal]

You might want to follow this thread, which could give you an idea what people think about currencies and forex;-

http://www.frequentflyer.com.au/community/playground/falling-help-14189-14.html


the fact is that the AUD is currently on a slide with minimal resistance and my gut feeling says it will be around the 0.70USD mark by end of June :shock:

 

[Mal]

the fact is that the AUD is currently on a slide with minimal resistance and my gut feeling says it will be around the 0.70USD mark by end of June :shock:

My gut feeling is similar, although I reckon 75c. There is much worse financial data to be released to the markets, and I can't see the $A being higher than it currently is by mid-late June.

 

[medhead]

The last bit of financial news I read from last week compared the current situation to the last fall back in 2008 (I think it was) from when the dollar was almost equal with the US. They made the point that it fell that time to about 75 or 76 cents. They were making a similar prediction for this time. given that the dollar is still around 81 cents. I'd guess that it might fall a bit more in the time period your talking about. But then I'd only guess 5 or 6 cents, which isn't much compared to the fall that has already happened. Maybe things will go the other way, due to some surprise news or other. But then I've heard from a japanese colleague tonight that the germans are playing hard with the greeks. so that can't be a good sign.

Of course it has been a few years since I've actively kept track of these things so my guess are probably worth nothing.

 

[ozbeachbabe]

I remember my first trip to the US in May of 1982 you received USD1.05 to AUD1.00 but since then it's never reached those dizzy heights again. When I next travelled to the US in June of 1985 it was down to only USD0.65 by then. From memory the lowest it got to was USD0.57!

Can't remember the exact reason the slide was attributed to - possibly a "recession Australia had to have". There was of course a change of Government by then too.

Last year in November when we went it was around USD0.92 so we couldn't have picked a better time to go & were extremely lucky.

Brooke, I guess if you've got the ability one way or another to acquire some US Dollars now I'd go for it.

Cheers

Oz

 

[medhead]

I remember my first trip to the US in May of 1982 you received USD1.05 to AUD1.00 but since then it's never reached those dizzy heights again. When I next travelled to the US in June of 1985 it was down to only USD0.65 by then. From memory the lowest it got to was USD0.57!

Can't remember the exact reason the slide was attributed to - possibly a "recession Australia had to have". There was of course a change of Government by then too.

Last year in November when we went it was around USD0.92 so we couldn't have picked a better time to go & were extremely lucky.

Brooke, I guess if you've got the ability one way or another to acquire some US Dollars now I'd go for it.

Cheers

Oz

You're showing your (lack of) age there. The recession we had to have was in the early 1990s. As a bit of history since that recession ended the australian economy has enjoyed continuous growth. (of course, iirc there was one quarter during the GFC that had a rubbery growth figure). So I take that growth, and I have heard the "world's greatest treasurer" explain the reason for the growth as linked to that recession, as a confirmation that out of the pain of the recession we got something good.

The dollar sank in the early 1980s because the dollar was floated. Australia stopped artificially holding up the value of the dollar. That was a financial reform that was probably also linked to the recession we had to have. But it came first and that recession wasn't the reason for the dollar sinking, the reason was that Australia was no longer artificially holding the value of the dollar high. Instead we let the market determine the value of the dollar.

The dollar is still floating (or sinking) now and that is why it moves up and down, because the world market decides what currency they want to hold. Our currency has been holding up because we have relatively high interest rates. So people can borrow money overseas at lower interest rate and send it here to earn higher interest. Sending the money here means they must buy Oz dollars, which sends up the value. Of course when times get rocky, like with Greece, then people want to move to USD, as it is considered a safe currency (of course, I don't agree with that right now, but no more financial heresy from me tonight). To do this they have to sell AUD, pushing down the value and buy USD.

Or perhaps your showing that you couldn't care less about politics back in the 1980s. If so, well done.

 

[ozbeachbabe]

You're showing your (lack of) age there. The recession we had to have was in the early 1990s. As a bit of history since that recession ended the australian economy has enjoyed continuous growth. (of course, iirc there was one quarter during the GFC that had a rubbery growth figure). So I take that growth, and I have heard the "world's greatest treasurer" explain the reason for the growth as linked to that recession, as a confirmation that out of the pain of the recession we got something good.

Or perhaps your showing that you couldn't care less about politics back in the 1980s. If so, well done.

I wasn't old enough to vote in 1982 but I am curious as to whom it was who called Paul Keating "the world's greatest treasurer". He might get gazumped by the current one if these mining taxes go ahead.

Ah yes the GFC, or the EFE as I heard someone refer to it the other day - excuse for everything!

So as long as interest rates on my mortgage are on the up and up I should be laughing when it comes to buying my USD Forex then.

Cheers

Oz

 

[Leumas]

As you see, everyone has a slightly different opinion. In particular, I don't think you can believe any of the media commentators or economists on the news. Afterall, they've repeatedly predicted AUD to be on par with the USD many times in the past 2 years and we still haven't seen that. These same group of economists are now saying the AUD may slide further still. Listen what you may but make your own judgement.

Having said all that, here's my 2c (whatever currency you wish it to be) worth...

Over the last few days, the dollar has stablised around the low 80's. I think it'll stay there for a bit, but with a cautious and slow climb because the underlying factor of the massive US debt is not going away any time soon. It may peek its head above the 90c mark but they will be nervous peeks.

The Euro situation is still a bit unclear despite the recent package to help Greece. The PIGS economies (the Euro countries in most trouble - Portgual, Ireland, Greece and Spain) may still flare up. While Greece is the worst of the PIGS, we haven't really heard from the other 3 yet. So this may still affect the USD cross. While the Germans are being diffcult in the Greek situation, it's understandable when it's often the Germans banks that lent to the Greeks in the first place (which people argue led to where we are now) and the German govt had to prop up these banks. The German govt doesn't want to throw good money after bad. Having said that, I think I see some currencies move independently between the Euro and the USD, i.e., the AUD vs USD cross isn't necessarily moving in the same direction or magnitude as the AUD vs EUR cross.

What these mean is that I think the AUD will slowly rise back up.

On the flip side, there are a few factors that will hold back the AUD.

Firstly, the RBA hinted rates will hold for the immediate future, so that means the AUD is less attractive now than earlier in the year.

Secondly, I think a lot of big players are holding back to see how that 'Mining Super Tax' will play out. IMHO, most players are just huffing and buffing and see who will the public over. So we won't see any major movements unless a clear picture emerge from that.

Anyhow, to answer the original question. I'd spread the risks. Forget where the AUD was a few weeks ago, you've missed that boat. Change some now. There's a RBA meeting next week, wait and see what the effect will be from that meeting.

Personally, I suspect by early-mid July, you're looking at the mid to high 80's. Looking at the charts, there seems to be some resistance at the 81c mark, so hopefully (for your sake), it won't drop below that.

 

[Alanslegal]

Personally, I suspect by early-mid July, you're looking at the mid to high 80's. Looking at the charts, there seems to be some resistance at the 81c mark, so hopefully (for your sake), it won't drop below that.

I like your optimism Leumas and I sure hope you 'crystal ball' is working perfectly, as I am in the USA [17/7 - 13/8]

 

[Sprucegoose]

I remember my first trip to the US in May of 1982 you received USD1.05 to AUD1.00 but since then it's never reached those dizzy heights again. When I next travelled to the US in June of 1985 it was down to only USD0.65 by then. From memory the lowest it got to was USD0.57!

Can't remember the exact reason the slide was attributed to - possibly a "recession Australia had to have". There was of course a change of Government by then too.

Last year in November when we went it was around USD0.92 so we couldn't have picked a better time to go & were extremely lucky.

Brooke, I guess if you've got the ability one way or another to acquire some US Dollars now I'd go for it.

Cheers

Oz

Oz I believe Slide was due to the floating of the dollar in 1985. The 'recession we had to have' was 90 ish.

Remember when we got 1.30 to the dollar!!!!!!! When was that?????

If we all knew the value of the currency down the track we would all be in our yachts!!!!

cheers

SPRUCE

 

[medhead]

I wasn't old enough to vote in 1982 but I am curious as to whom it was who called Paul Keating "the world's greatest treasurer". He might get gazumped by the current one if these mining taxes go ahead.

Ah yes the GFC, or the EFE as I heard someone refer to it the other day - excuse for everything!

So as long as interest rates on my mortgage are on the up and up I should be laughing when it comes to buying my USD Forex then.

Cheers

Oz

Indeed I was a long way off voting in 1982 as well. I think I was more concerned about choosing life and getting fluoro socks.

But I did have a strange set of circumstances in the 1980's. Lived in Joh's queensland, politically active father, family got really stuffed around by Joh's government to prevent possible political damage, and queensland was a real hot bed of unrest back then. So I really grew up seeing and following all this stuff. Plus I've been a pretty keen follower of political happenings until the last couple of years, when I formed the opinion that I got better things to do than follow those losers.

I'm not sure of exact details but I think there was some world group that voted Keating the world's greatest treasurer. But I gather there might have been some direct input from Keating into getting that title. So I really do use the term in an ironic way. But I do think he was pretty good because he did do the hard things with the australian economy despite it being unpopular. This can be contrasted with Treasurer Howard (and maybe PM Fraser) who just didn't have the guts to reform the economy, when given the chance. So regardless of my other hatred of the man, I do at least respect his courage. (but as Humphrey would say "courageous move minister")

Anyway, enough of my rubbish background. On the case of interest rates, remember that has to be balanced against people moving to safety. If there is financial unrest it doesn't matter how high Australian interest rates are people will want to hold "safe" assets that means USD or Gold. The AUD isn't considered safe and so long as the PIIGS (don't forget Italy) are a problem then people will want to hold USD. That has been shown by the recent movements in the AUD. Of course, as I alluded to the USD is not that safe, IMO, due to their massive debt. If I had a few lazy million lying around I'd be getting into the chinese currency, they are the ones who have provided the debt to the USA (in general global terms). I find that a scary prospect for the current world order.

 

[Leumas]

It's at 88c this morning... It may not be a bad time to change some now.

 

[Brooke01]

It's at 88c this morning... It may not be a bad time to change some now.

Thanks Leumas - we "took the plunge" and got all our spending money on Monday - 88c being the sell rate, equated to .8560 for the buy. More than happy with this !

Away we go in two weeks

Cheers,

Brooke