What's your prediction on the Australian Dollar?

I was in Argentina last year when the peso went from about 31 to the AUD to 38 over the space of a day. It then gradually drifted down to around 41. Today it is in the 37s so AUD has declined around 10% against an economy (Argentina's) that has massive problems compared to us. I am struggling to understand this.
 
2.3 trillion & 106% to GDP

And about to go up by another trillion (so will then be over 150% GDP) over the next few months by the looks of it, and investors are ecstatic that the US debt is going to balloon even further....
 
I was in Argentina last year when the peso went from about 31 to the AUD to 38 over the space of a day. It then gradually drifted down to around 41. Today it is in the 37s so AUD has declined around 10% against an economy (Argentina's) that has massive problems compared to us. I am struggling to understand this.
Currency movements are rarely about one specific issue. In the short term it may about interest rates but it might tie into economic outlook, government of the day, exposure to global issues..

An example is that Argentina may have little or no exposure to tourism or coal exports or iron ore exports compared to Australia. They are a much less wealthy country as their economy is smaller (about 1/3 the size of the australian economy) but it means they might be more resilient to a global slowdown as more of their consumption is internal.

Wealth nowadays is basically created by scale (exporting what you are good at exporting).

Money is always moving and looking for a home and modern technology allows money to be moved in seconds.. and often in anticipation of what is happening rather than what is actually happening..
 
It will keep falling.

The uncertainty over demand for our various exports means demand has sharply dropped.

It should pick up again in the next 6 months as export volumes pick up, once China resumes normal operations.
 
A global recession will hit China badly - it is the factory of the world.

The rest of the world has just woken up to the fact that they have allowed China to control them.

Just-in-time-inventory is a bit like many failed financial products/schemes - it depends on many assumptions. When any one of the assumptions fails then a domino effect ensues.

Global tourism is worth just over 10% of global GDP - it has just dropped close to 1/20th of what it was.
The multiplier effect (eg airline staff laid off/on unpaid leave) is between 3 to 5 times depending on the country. Taxis at the airports/ports lose trade, the petrol they would have bought is no more, the car wash places loses trade, the lost earnings of the taxi driver see them cut back...

Now think about the dry cleaners etc etc.

Australia is the most reliant country in the world on China, and is seen as the global play on growth. But we're also very heavily dependent on both tourism & 'exporting education' aka foreign students in Australia.

Does the term '3 strikes and you're out' resonate.

Australia also has the highest (or 2nd highest depending on the source) personal debt (love those mortgages), and supposedly (ACOSS survey) 3 out of 4 households having less than $1,000 in savings.

Perfect storm has hit just at the time when it could be argued that we have the poorest set of politicians in Govt & Opposition at every level in Australia AND at the time when we've got the lowest level of trust in them (Sport Rorts, Regional Recovery Funds, illegal political donations, unsolicited proposals reaping billions for developers at the community's expense etc etc).

DESPITE having the biggest boost in exports in modern Australian history - we did not have a big enough TRADE surplus to pay 30% of the interest on our existing foreign debt AKA we went further backwards. Indeed the more LPG we export the worse our overseas debt becomes due to the 'structuring' of the Qld LPG finances.

A favourite expression doing the rounds in 1987, "Never try catching a falling knife"

Perhaps the 'can' cannot be kicked down the road any further?

Typically over 90 cents in every dollar spent in retail goes overseas, so just as the cash splash back in the GFC saw sales of big screen TVs increase 3 fold and keep many Chinese factories going - the latest version will likely have a similar but different effect. Possibly not big screen TVs but spent on anything other than fresh F&V or meat and it will be at least 80 cents per dollar overseas.

Given the high degree of overseas overship of food brands these days - it may be worse. I deliberately left out increased alcohol sales as that is even worse.
 
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Paid for flights in USD a few months ago. They're all being cancelled, one by one. Getting paid back in USD....actually making money out of these transactions!
It does work the other way around though if you paid in USD....
So far the refunds amount to about a $14 USD loss. Though repurchasing the rebooked tickets would be cheaper now....

Wondering about where (or if) I should be wandering
Fred
 
It does work the other way around though if you paid in USD....
So far the refunds amount to about a $14 USD loss. Though repurchasing the rebooked tickets would be cheaper now....

Wondering about where (or if) I should be wandering
Fred

As Manuel would say 'Que'
 
This makes no sense. Coronavirus has hit worldwide and the AUD is paying the price.

1 AUD = 18.26 THB

and heavy loses against most currencies. It's at the point where I cannot justify any further trips to Thailand let alone build a house and it's going to get worse. :(
 
The AUD has always been seen to be a risk proxy for currency, and that has certainly been the case over the past few weeks.
 
This makes no sense. Coronavirus has hit worldwide and the AUD is paying the price.

1 AUD = 18.26 THB

and heavy loses against most currencies. It's at the point where I cannot justify any further trips to Thailand let alone build a house and it's going to get worse. :(

UK has had a massive drop in the last 24 hours too. Not good. All the gains it started to make after 'Brexit' on 31/1 have now gone out the window and it's even lower than the low it had hit post the Brexit vote. Fun times.

Over the last week:
- GBP/USD 1.27 -> 1.15
- GBP/EUR 1.14 -> 1.05
- GBP/AUD minimal change
 
And about to go up by another trillion (so will then be over 150% GDP) over the next few months by the looks of it, and investors are ecstatic that the US debt is going to balloon even further....
That's not a problem because it's nearly all borrowed from the Chinese. The exact figures may have changed with this corona virus problem, but at the end of 2019 China's GDP was predicted to overtake the USA's by 2024. The USA will never let that happen because they can never let China "set the rules". There is an underlying reason why Trump wants American companies to quit manufacturing in China and it's not just about jobs in the US. At some stage territorial disputes, economic sanctions etc. will lead to conflict between the US and China, Chinese assets might be seized and the US will "tear up" all the debt they owe China.
What's another $Trillion if you never intend to pay it back anyway!!!
 
As well as the commodity prices falling, I am wondering if today's fall is linked to the RBA announcing they will "print money" / quantitative easing.
Can someone smarter than me explain how this is different to government debt ?
 

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