Possibilities for $AU

Ok I'm not sure on other people's thoughts and I know nobody can gase into the crystal ball!

The circumstances currently, $US is likely to rise with a minor increase in interest rates, possibly December? In Australia interest rates are likely to drop slightly from their current record lows meaning $AU will receive pressure to drop with a flight away from the $AU to the $US which would give better returns.

Could we we see levels less than 0.7. What's your thoughts with the £, this tends to react with the $US and to me seems to be in a very strong position?

Only showing interest as we will have some money to move across soon and obviously want to maximise the exchange advantage.

S

Which way are you moving your money to/from? What currencies are you exchanging?

We have a chunk of money still in the UK. We moved over enough to last until at least easter (not working currently and harbouring hopes of retiring early over here still). I am banking on an improvement in the exchange rate in 2016 but there are so many variables as well as issues that nobody can even forsee. I think that if we can move our savings and our pensions over next year at 2.25 or better we may not have to concern ourseves too much about working (but calculations are quite tight on that). Personally feel that the odds are in favour of 2.25 next year but who knows?

It would be £ to $AU, I simply see UK giving all the signs of strengthening and AU taking a short term drop due to the flight of currencies and investments in other countries such as US or UK where short term investors can possibly return a larger profit.

Longer term I can see nothing but great news for Australia especially after listening to apparent experts saying Australia has all the ingredients to treble in size, outputs and wages to grow circa 15% faster than inflation!

S

Strength of AU$ correlates well with the price of oil, iron ore and coal, Australia's main exports...

So if commodity prices pick up, I would expect the health of the Australian economy to pick up and the AU$ to strengthen.

Strength of AU$ correlates well with the price of oil, iron ore and coal, Australia's main exports...

 

So if commodity prices pick up, I would expect the health of the Australian economy to pick up and the AU$ to strengthen.

If only it were that straightforward. At the start of 2008 oil prices were US$140 per barrel and you could get AUD2.25 to the GBP. Roll forward 12 months and crude oil is $60 a barrel and the exchange rate is AUD 2.10. Oil prices recovered and fluctuated around $100 for the next 4 years or so. The exchange rate for the two currencies fell and stayed around 1.5 so the overall fall in oil prices did not corespond with a fall in the AUD relative to the GBP; in fact the reverse.

Looking at historical coal prices they have similar trends to oil (though less extreme movements) so no real correlation. Falling demand for iron ore in the past 12 months has impacted on the AUD chiefly because it highlighted to investors that the currency was dangerously overvalued hence a return to something like historic norms.

Ok I'm not sure on other people's thoughts and I know nobody can gase into the crystal ball!

 

The circumstances currently, $US is likely to rise with a minor increase in interest rates, possibly December? In Australia interest rates are likely to drop slightly from their current record lows meaning $AU will receive pressure to drop with a flight away from the $AU to the $US which would give better returns.

 

Could we we see levels less than 0.7. What's your thoughts with the £, this tends to react with the $US and to me seems to be in a very strong position?

 

Only showing interest as we will have some money to move across soon and obviously want to maximise the exchange advantage.

 

S

Yes you are right. But the US/UK is not in a hurry to raise, and Australia not in a hurry to drop. So you will have to be patient, and hope nothing adverse happens in the meantime.

little to do with oil. More to do with iron ore - Aus's biggest export. Also interest rate differentials and outlook for each country's interest rates. UK keep threatening to drop but probably won't. Aus will probably drop early next year - a cert if iron ore and other commodities keeps falling. $2.25 possible next year.

I read yesterday January maybe the month of review. Quarterly inflation figures come in for AU and are likely to be poor prompting a possible drop in interest rates to stimulate the economy. US have just hinted they are to increase interest rates however not next month suggesting maybe the month after ie January?

As mentioned previously, I'm not any kind of Gordon Gekko however would kick myself if we missed an imminent rise which would potentially settle our mortgage here.

S

I read yesterday January maybe the month of review. Quarterly inflation figures come in for AU and are likely to be poor prompting a possible drop in interest rates to stimulate the economy. US have just hinted they are to increase interest rates however not next month suggesting maybe the month after ie January?

 

As mentioned previously, I'm not any kind of Gordon Gekko however would kick myself if we missed an imminent rise which would potentially settle our mortgage here.

 

S

Maybe, but the UK figures also affect the £. Going into winter, things slow down a bit and they may revise economic predictions. Last quarter the UK economy cooled off, this may be worse as seasonal businesses close down.

25th November, but watch out for early economic leaks that may affect the rate if they decide to dribble some bad news out.