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Please find below a brief roundup of this week major currencies. EUR: Rumours and stories of a new and conclusive solution to the Euroland debt crisis came thick and fast: The new Spanish austerity package would make the Spartans look like Barbra Cartland; the jointly-guaranteed "eurobond" project would be revived; the IMF would lend €600bn to Italy. None turned out to be true but collectively they supported the euro. Nevertheless, investors are increasingly reluctant to lend their hard-earned to Euroland governments. They need serious action to stabilise the situation and they need it now. USD: The failure of a Congressional "supercommittee" to agree on a deficit-reduction programme has not put off investors in US Treasury bills and bonds. They can live with the stalemate because they know America will always repay its debts; it can print as many dollars as it needs. The same is not true of euro zone governments, none of which has the same printing power. Greece or Italy could default; the US cannot. AUD: An almost total lack of Australian economic data left the Aussie to wander around in the unlikely company of the Swiss franc and Japanese yen. They were accompanied by the Canadian dollar, which also had no place of its own to go. The commodity currencies received a boost early this Monday after the report that the IMF would hand over €600bn to cover Italy's refinancing needs for the next year. It was enough to turn a losing week into a winning one for the Aussie. NZD: Like the AUD, the NZD found itself in the middle of the field after a strange week in which market liquidity was drained by the US holiday and investor's appetite to get involved was hampered by their lack of conviction, especially with regard to the euro. The NZ dollar's big break came this Monday morning when Prime Minister John Key's National Party won the general election by a street. Investors think he will deliver free markets and a balanced budget. CAD: The Loonie kept company with its antipodean cousins, neither shining nor sinking in mid-league. A 1.0% monthly increase for retail sales in September was twice as strong as expected and therefore positive for the currency, but it served more to nudge than to drive its direction. Had it not been for the Keys election win in New Zealand the Canadian dollar would have come through the week as the commodity currencies' leader. GBP: Sterling was far from successful in the week's currency lottery, sharing penultimate place with the South African rand. It did nothing wrong; the UK economic statistics were mostly in line with or better than expectations. The problem was that investors seemed more inclined to buy the euro on good news than sell it on bad. Because they were buying US dollars anyway the pound got the rough end of the stick.
Hi all I know this might not be directly relevant to some members, however please see a brief summary below of the major global currencies (I have received some requests for this type of information). AUD: The weak US payrolls number hit every commodity-related currency hard because, as legend has it, if America sneezes the global economy catches a cold. That has not prevented the Aussie from hitting a record high against the pound and coming close to its all-time high against the dollar but it might be a sign that an end to the one-way street is in sight. USD: If President Obama and the house of representatives cannot reach agreement on the budget and the debt ceiling the United states government will run out of money on 2 August. Few believe it will come to that but the possibility makes investors nervous about the dollar. Last week's horrendously soft payrolls number is another reason for their dislike. NZD: New Zealand's products are mainly meat and dairy, exports which unlikely to be compromised in any major way by the possible fall in demand for minerals and metals. In the last week the Kiwi has scored record highs against the US dollar, the euro and the pound. It might have further to go. CAD: Canada's economy is closely aligned to that of the United States and to global demand for oil, of which it is a major exporter. With the US economy stuttering and the risk of a financial crisis in Europe dampening global risk-appetite the Loonie is fighting on two fronts. ZAR: While the rand is vulnerable to any reduction in demand for commodities, one of its products - gold - is as popular today as it ever has been. On top of that South Africa's 5.5% benchmark interest rate comfortably outweighs its 4.6% inflation rate, a situation that no European or North American currency can match. EUR: The failure of EU ministers to come up with a comprehensive and permanent solution to the Greek debt crisis is turning into a disaster for the euro. The longer they fail to sort it out, the worse investors fear the problem will become. Italy has now joined Greece, Ireland, Portugal and Spain on the list of government bonds that investors least like to own. As a result the euro has lost ground and is likely to lose more.
Guest posted a topic in Money & FinanceSay you have a portfolio of - foreign shares, canadian, singapore..etc, all over the world. - assets in the UK, rentals - gold/silver bullion - also hold different currencies as cash - plus do online trading frequently, margin. I am interested in learning about oz tax, so my thinking so far is... - rental income and capital gains charged to oz...based on valuation at date or PR activation. otherwise pay CGT to uk...when you sell? - owning foreign shares is a nightmare under the current rules, but those rules are being repealed (last 2009 budget but i have no details), so I assume I can still hold these shares and only pay tax on sales and dividends. The idea now is I pay CGT on these quarterly even if i dont sell them. crazy! no wonder they repealed this. - the CGT tax is great if you hold assets more than 1 year, 50% redemption, so assuming a tax of 40%, then its 20% you pay, same as UK BUT, in the UK you dont need to hold for 1 year! so oz is frankly worse if you are holding investments short term. - gold, silver, i assume there is no GST to pay, and it is simply a normal asset..let me know. is there an issue if gold is held outside country. - being a trader, does this help you tax situation, should I try to get this thru? i would be interested to know. I assume being a trader means all profits treated as income not CGT. so probably makes no difference! - holding different currencies, now here is the tricky one, i think i pay CGT on these currencies...which is absurd! not fair, it is cash! my risk. can someone agree with this? uk of course does not charge CGT.