Good Exchange Rate

[Guest sydneystuey]

Hi all,

 

I'm a newbie and this is my first post so be gentle :spinny:.

 

My girlfriend and I are started the emmigration process (she's an Aussie) and have opened an account with ukforex to transfer some funds to Australia. I've just started to monitor the exchange rate now and have noticed that £1/$2.20 seems to be about the average at the moment.

 

Do people think this is quite low, what are people's expectations about the current in 09? I've read many reports to suggest that the pound *may* strengthen given Australia's economic problems are lagged behind that of the UK/US.

 

I want to get the best deal for our money. We've been saving for 2 years for a deposit on a house in Sydney and the wrong decison could cost thousands of AUD if we get the timing wrong.

 

Thanks in advance for any advice.

 

Stu

[Guest sunseekers]

Hi Stu

 

Im no expert at all but have been tracking the value for 12/18 months now, It peeked at 2.69 last Oct 08 and i greedily still hung on and regret it now. We are not really in any hurry as we dont need our lump sum till we buy a property which wont be till i see if the recession will knock dollars off the value of Oz properties so gonna hang on 12-18 months to buy.

From looking at its history over the last ten years and also from some finacial peoples predictioins iv looked at online it is my humble opinion that it will go up some around june/july 09. In any case i will buy if it hits 2.6 again . id be happy to get 2.45 upwards if i was in a hurry though.

 

Just my thoughts

 

Colette x ps ...anyone got a crystal ball hee hee

[TaniaColin]

Hi Stu and welcome to the forum

Best of luck with the process

Tania X

[Guest sydneystuey]

Hi Colette,

 

Thanks for the advice. What I've seen the GBP/AUD has been on a downward trend for the last 10 years so I'd be surprised if it ever hits 2.60 again, but I suppose you never know. Given the UK is in real trouble now I might move on 2.30 in the short term and see whether Australian interest rates come down further. I wish I was on the ball last October because those rates seem like a blip in the system!

 

Stu

[Phoenix]

here is the 5 year history of the £/$ rates

 

Currency Converter | Currency Convertor for all Currencies - Yahoo! Finance UK

 

The sharp drop and blip in October suggest to me that the £ is still rated fairly low, even is there was a steady downward trend, I would still be on the lookout for 2.4-2.5.

 

News fro Oz is that the recession is starting to bite down there, so it would not surprise me to see the £ gain a little more ground yet.

[Guest peterb]

When I moved a few years ago, around 2.4/2.5 was around the historical average I seem to remember, however, as stuhorsman said, around 2.30 might be the best you can hope for.

I'm no financial advisor, so please don't take this as gospel, but parts of the equation are explained on the BoE website:

 

"a rise in interest rates relative to those in other countries will tend to result in an increase in the amount of funds flowing into the UK, as investors are attracted to the higher sterling rates of interest. This will tend to result in an appreciation of the exchange rate against other currencies." - hence the reverse is also true.

 

As the Bank of England rate is only 1%, this isn't very favorable for investors, so they will go for currencies where the exchange is better. The Australian Reserve Bank's cash rate is currently 3.5%, making is a more favorable proposition for investors, resulting in an strengthening of the Aussie Dollar against the pound.

 

After the February cut this month, Australian economists aren't predicting a cut in March, so the exchange rate probably won't improve for you in the short term. It's been suggested that rates may drop again in April by up to 0.5% which would put the rate in Oz at 3%.