What's your prediction on the Australian Dollar?

[Pushka]

The other way of dealing with future travel if you don't want to pre-purchase travel arrangements, have the cash (and are a gambler) is to open a Wise account and buy some USD now to use in future travels.

I have a Wise card but never used it. I've just loaded it to Wallet on iPhone. So, if I add USD to it, then travel to a different country (in this case Indonesia) does this idea work for me too?

 

[11sjw]

Mmm, you all have me thinking I should buy some Euro sooner rather than later.

 

[Freq Flier 2013]

Have to hope our Super Funds are across all this. Also BHP dividend cut by 40% this week. Gulp.

From what I understand bhp results were in line with expectations. Except capital expenditure

 

[dajop]

I have a Wise card but never used it. I've just loaded it to Wallet on iPhone. So, if I add USD to it, then travel to a different country (in this case Indonesia) does this idea work for me too?

The way it works it will take off the balance you have in the currency you are spending in first, if that is zero it will take it off the currency you have the lowest balance with.

So if you have USD, and spending in IDR yes it will deduct it from your USD balance.

If say, you have also have a small EUR balance (smaller than your USD balance) and paying IDR it would deduct that before deducting the USD.

 

[Pushka]

From what I understand bhp results were in line with expectations. Except capital expenditure

So hopefully super funds already geared for it.

 

[RAM]

So hopefully super funds already geared for it.

No.

Most super funds are near enough to closet indexers as not to make a difference. The majority outsource the actual investment to wholesale fund managers who are either 'passive' (hold companies in proportion to their weight in the index) or 'active' (who are supposed to back their judgement on underweighting/overwieghting different companies).

In reality, most hold virtually the index weight of each company that way they won't stand out too badly vs the competition. Sad but true. There are a few who really do take active bets but just a handful.

 

[rock86]

We are running with 0.67 currency in our US account which we thought was a bit ordinary but looks ok at the moment.

I was only saying internally we should look at setting a floor and cop the few bips a couple of week back when it was at 66c as I thought the short-medium term is going to be lower, unfortunately it looks that way.

The CCP ain't coming to the rescue that people seem to think will happen, for one if they do the yuan will likely get smoked, but there's a lot of underlying structural issues (there will be more then we are aware given it is a hermit kingdom).

Maybe the only thing that could save the AUD is something unforeseen happening in the US, there is certainly a credit crunch happening in the states at present, but whether that leads to anything further who knows.

Interesting times ahead....

 

[RAM]

I was only saying internally we should look at setting a floor and cop the few bips a couple of week back when it was at 66c as I thought the short-medium term is going to be lower, unfortunately it looks that way.

The CCP ain't coming to the rescue that people seem to think will happen, for one if they do the yuan will likely get smoked, but there's a lot of underlying structural issues (there will be more then we are aware given it is a hermit kingdom).

Maybe the only thing that could save the AUD is something unforeseen happening in the US, there is certainly a credit crunch happening in the states at present, but whether that leads to anything further who knows.

Interesting times ahead....

Or as the Chinese Curse goes, "May you live in interesting times."

Spoiler: The long term (but while we are still alive) outlook for China, & its demand for Australian commodities is BAD.

The long term (but while we are still alive) outlook for China, & its demand for Australian commodities is BAD.
____________________________________________________________________

China has the worst demographic outlook of any country. The 'one child' policy potentially will see China become a failed state due to the lack of workers to care for the elderly. At one stage (post 1950s) there were about 4 to 5 workers per over 65 yr old. It is now down to 1.something and due to head below 1 in the years ahead.

A second issue, from the 'one child' era is that the (normally males in the urban areas, with female babies often dying unexpectedly shortly after birth, coincidentally so the family name continues...) boys became known as 'Little Emperors'. Generalisations to follow...

They never had to lift a finger at home, waited on and lavished with whatever the parents could afford. Resulted in several generations who make BAD workers. Low to no work ethic, won't follow instructions, etc etc.

In early 2000s doing some in depth research on China I found that there was a worker shortage. The ideal factory worker was an unmarried, female, from the country & aged under 25. They were in very short supply, to the extent that they were being offered effective sign-on bonuses as well as 'anniversary bonuses'. Traditionally many rural Chinese would work for the factory that was started (long ago) by someone originally from their village. The factory was not in their village though, and required the workers to live on-site in dormitories.

This started back when perhaps 80% of the population lived rurally.

With the shrinking rural population, the worker supply used to hard work has fallen drastically as well just as at the same time the % of Little Emperors began to sky rocket. Perhaps this is also why an increasing proportion of young woman choose NOT to marry or have children...

All-in-all China is in the thralls of a vicious cycle.

Meanwhile China has no health safety net. If you cannot pay then you do not get treated, potentially going blind, organ failure, die etc. Similarly there is no Retirement Care system (vs in Australia). Traditionally the rest of the family looked after the aged parents (of which many did not live that long).

Today parents & grand parents are not getting killed off by famines etc so their population % has ballooned, again just as the available family to look after them has fallen.

At the same time, the proportion of Chinese fresh water that is so polluted (poisoned by industrial waste going straight into the rivers thanks to paying off the local CCP officials) is upwards of 70 to 80% - hence the spread to Africa & South America for agricutural produce.

____________________________________________________________

Or the short form - don't count on a China resurgence to propel the AUD upwards for any length of time.

Think of China as akin to Alan Bond (see wikipedia if a new name to you).

 

[tgh]

Sobering views like the one above make future planning a difficult exercise.
Timing is everything and Armageddon , arguably inevitable, may be a long way down the track.
Historically , War has been a functional and effective reset process , slimming down population numbers and pushing industrial activity.
I find it hard to model war as a useful agent of change in the current world and at risk of error will bank on a very long and slow decline.

 

[elanshin]

Sobering views like the one above make future planning a difficult exercise.
Timing is everything and Armageddon , arguably inevitable, may be a long way down the track.
Historically , War has been a functional and effective reset process , slimming down population numbers and pushing industrial activity.
I find it hard to model war as a useful agent of change in the current world and at risk of error will bank on a very long and slow decline.

I personally don't believe we're in for a long slow decline.

China would likely start fireworks before entering long term decline as a way to try and change itself. Whether that's a war or some radical policy changes - who knows.
US is brimming at the seams with political divide and class divide.
Japan and Korea are likely to hit the Aging population well before China.

Something in the world is going to give in the next decade most likely. It's a case of what and how big will it be.

 

[Cruiser Elite]

I find it hard to believe AFFers are re-thinking travel plans due to ex rates - keep a close eye out for that approaching bus next time you cross the road - you are long time dead

 

[Pushka]

I find it hard to believe AFFers are re-thinking travel plans due to ex rates - keep a close eye out for that approaching bus next time you cross the road - you are long time dead

Well some of us have to look at value and needs.

 

[dajop]

I find it hard to believe AFFers are re-thinking travel plans due to ex rates - keep a close eye out for that approaching bus next time you cross the road - you are long time dead

There's often a bit of hedge anyway. Low AUD usually means the world economy is a bit stuffed and demand is suppressed for various reasons. I remember when AUD was 50c vs USD. In New York was paying $100 USD /night . A few years later the AUD had increased in value, but so had the price of New York hotels.... (but granted in early 2002 people were still a bit scared off from visiting NYC).

 

[cove]

I remember being in Chicago at a Hyatt hotel when the $AUD sank below 50 cents quite a few years ago.
65 to 67 cents is quite ok.
Sure inflation is out there but don’t stop anything.

 

[JohnK]

I find it hard to believe AFFers are re-thinking travel plans due to ex rates - keep a close eye out for that approaching bus next time you cross the road - you are long time dead

Not everyone that travels has surplus funds to fund their travel.

Everyone has their own reasoning for wanting to travel. I need to travel. I need to get away from the mess that is work and Australia. Local travel is way too expensive and not worth it. Plus wife gets home sick so perfect time to combine all of the above into a well deserved holiday.

Just on 10 years ago the AUD->THB exchange was 32 baht. In 2020 it dropped to 17 baht and is now around 22 baht. Makes for planning holiday very difficult especially with ridiculously high economy airfares on top.

 

[Pushka]

Not everyone that travels has surplus funds to fund their travel.

Everyone has their own reasoning for wanting to travel. I need to travel. I need to get away from the mess that is work and Australia. Local travel is way too expensive and not worth it. Plus wife gets home sick so perfect time to combine all of the above into a well deserved holiday.

Just on 10 years ago the AUD->THB exchange was 32 baht. In 2020 it dropped to 17 baht and is now around 22 baht. Makes for planning holiday very difficult especially with ridiculously high economy airfares on top.

It's also about life stage and priorities too. You have a young child to raise - for the next 70 years!

 

[JohnK]

It's also about life stage and priorities too. You have a young child to raise - for the next 70 years!

True but my mental health is just as important if I'm going to be around for another 70 years.

P.S. I'm extremely stubborn which I'm sure you've noticed. I'm prepared to sacrifice everything so that I can go to Thailand often especially now I have a house there. If wife wasn't working we'd be in Thailand every school holiday but for now we'll go twice a year. Need to somehow set up an income stream in Thailand that is not affected by dumb exchange rates.

 

[AirportRail]

Of course global exchange rates aren't all downside for Australia. If you've got flexibility to travel to places that don't use USD, GBP or the Euro you can take advantage of the AUD being stronger against some other currencies. (Link: Nine destinations where the Australian dollar goes further)

I think if you're a budget conscious traveller taking into account the exchange rate when choosing destinations is sensible.

 

[daft009]

Of course global exchange rates aren't all downside for Australia. If you've got flexibility to travel to places that don't use USD, GBP or the Euro you can take advantage of the AUD being stronger against some other currencies. (Link: Nine destinations where the Australian dollar goes further)

I think if you're a budget conscious traveller taking into account the exchange rate when choosing destinations is sensible.

Sri Lanka deserves to be on that list.
~200LKR = 1AUD, used to be half that pre-covid

Had a haircut with awesome head massage for 2AUD last month

 

[JohnK]

Sri Lanka deserves to be on that list.
~200LKR = 1AUD, used to be half that pre-covid

Had a haircut with awesome head massage for 2AUD last month

Oh wow. Haircuts have gone the other way round in Thailand.

From being able to easily get a haircut for ~80-100 baht pre Covid it is now mostly 150 baht and looking like 200+ baht soon.