Falling $AUD

[Pepscobra]

The $AUD has taken a relative battering since the RBA dropped interest rates earlier in the month.
It is now trading below US99c and looks to be steadily falling.

So, how low do you think it will go?

Are our manufacturers and exporters about to enjoy some better times?

Will eBay and online shopping decline?

[cs123]

Was having a conversation with someone about this the other day.

Be a good thing for our industries if it does drop. I suspect that a lot of people have become accustomed to a higher dollar and will take it "hard" when their OS holidays and toys from OS cost more.

[damoose]

Personally I would like to see it at about 70c . That would at least give any manufacturing we have left a fighting chance of being price competitive.

[Pepscobra]

US70c is a bit of a stretch... I can see it dropping to about US90c though.

[LG17]

Bugger - makes my parts importation dearer (and no I can't buy them here!).

I guess it has spent a lot of it's time in the high 80s so that's where it will probably end up eventually.

[Fev]

crap I'm going to the USA in July I need to buy some cash!

[comagutsa]

im spewing i have been waiting for some stuff from the US that i ordered 2 months ago as it was on back order ..was $1.05 when i ordered but they dont charge you till its sent ..spewing but still would be a hell of a lot cheaper than buying from here

[Bowser22]

If it sits in the low $0.90's maybe high $0.80's I will be happy and won't be out of a job. Aluminium smelters in this country have been doing it tough these last three years.

[Crazy Dazz]

Umm, Dollar took a hit when government came out and admitted they had ****** the economy yet again, and the surplus they promised was now a $20B blackhole. It will steady, and start to climb as the September election looms near.
AUD is a commodity based currency, as long as demand for our commodities remains high, so will the AUD.
That said, there are signs that the US & British economies may be spluttering back towards life, so you can expect the USD and GBP to also get stronger.

[Bowser22]

Originally Posted by Crazy Dazz

Umm, Dollar took a hit when government came out and admitted they had ****** the economy yet again, and the surplus they promised was now a $20B blackhole. It will steady, and start to climb as the September election looms near.
AUD is a commodity based currency, as long as demand for our commodities remains high, so will the AUD.
That said, there are signs that the US & British economies may be spluttering back towards life, so you can expect the USD and GBP to also get stronger.

I believe this will bring the $AU down sooner than commodity prices

[Yellow_Festiva]

I think the dip is temporary and the dollar will go back up a few cents above parity in a month or 2.

[xisled]

This is the start of something bigger. Next will be the house boom. Everything is going to start to get tougher.

[Pepscobra]

Originally Posted by xisled

This is the start of something bigger. Next will be the house boom. Everything is going to start to get tougher.

How do you mean?

[Sprint]

Its a scam controlled by desperate governments, join the dots people.

[ryeman]

The Dow is at nominal record levels (bubble?) hence money parked in Oz is now trending back to the US stock market.

[damoose]

Originally Posted by Pepscobra

US70c is a bit of a stretch... I can see it dropping to about US90c though.

I could have worded this better , I dont believe it will ever get back to 70c
Maybe 90c in the short term All really depends on the strength of the Yanks economy which no Aussie government has control over..

[350125GO]

Mid 80s long term would be my estimate, no idea short term. I owe $4K to the USA based engine builder that Ill be paying in the current months, looking at opening a foreign currency savings account with HSBC atm.

[Pepscobra]

Its broken US97c today, hasn't been this low for 18 months.

[mik]

http://online.wsj.com/article/BT-CO-...googlenews_wsj

Goldman Sachs Cuts Aussie Dollar, Yen Forecasts


By Jessica Mead

Goldman Sachs slashed its forecasts on the Australian dollar, citing Australia's deteriorating economic fundamentals, falling commodity prices and slower Chinese economic activity.

The bank now sees the Australian dollar trading at $0.97 against the dollar in three months compared with a previous forecast of $1.05. It now expects the Aussie dollar to trade at $0.96 against the dollar in six months, from a previous forecast of $1.03, and to trade at $0.90 in 12 months. Its previous 12-month forecast was $0.98 against the dollar.

"Our view remains predicated on Australia's deteriorating fundamentals, prospects for lower commodity prices, slower Chinese activity and the likelihood that the search for yield will decline as global growth sustainably recovers," the bank said Thursday in its monthly foreign-exchange update, distributed to media Friday.

A weaker Australian dollar is one of Goldman Sachs's top currency themes for 2013. At 0850 GMT, the Australian dollar was trading at $0.9738 against the greenback, having weakened 6% in May.

Goldman Sachs cut its forecasts for the Japanese yen and now sees the dollar trading at Y105 against the yen in both three and six months' time and at Y110 in 12 months. It had previously seen the dollar at Y102, Y105 and Y105 respectively. The dollar is trading at about Y102.50.

It said that the tweak to its forecasts had been precipitated by a patch of better data from the U.S. and the rapid rise in U.S. yields, as the potential for the Federal Reserve to taper quantitative easing came into focus.

The bank also slightly lowered its expectations for the euro against the dollar, and now sees the euro trading at $1.34 in three months and at $1.37 in six months compared with previous forecasts of $1.36 and $1.40. It kept its 12-month forecast at $1.40. The euro was trading around $1.2850 in mid-morning European trade Friday.

Write to Jessica Mead at jessica.mead@dowjones.com

[Moby Vic]

I can see I picked the wrong year to visit.

[mik]

Looks that way mate, I, m hoping like a lot of others after the election (sept 14) things will be looking up.

[jpd80]

Damn, I can't get my refinancing quick enough, I had planned to get my house switch done and put $100K into Ford stock
but in the last two weeks, Ford has jumped from below $12/share to over $15 today and the Aussie dollar is receding.

I recon if things keep going , A $100K in Ford stock will see a hedge against currency and a nett increase
of 50% on investment over the next six months. I Gotta get in before Q2 figures are posted in early July....

[mr smith]

Originally Posted by jpd80

Damn, I can't get my refinancing quick enough, I had planned to get my house switch done and put $100K into Ford stock
but in the last two weeks, Ford has jumped from below $12/share to over $15 today and the Aussie dollar is receding.

I recon if things keep going , A $100K in Ford stock will see a hedge against currency and a nett increase
of 50% on investment over the next six months. I Gotta get in before Q2 figures are posted in early July....

To buy US stocks is it just a matter of a good broker?

[cheap]

The falling dollar is very related to the just announced budget deficit. This government repeatedly promised a surplus and the poof there is another deficit.

The markets have lost patience with this government and have voted with their cash, the once 'safe' haven that Australia was is not so safe - hence the market is selling the $AUD and finding somewhere else.

The market doesn't like doesn't like being told one thing and getting something different. This exactly the sort of nonsense that befell Greece, where the Greeks were lying through their teeth about their financial position, when the truth became know there was a run on their banks and now they're in deep poo.

Now I'm not saying Australia is like Greece, but I just hope the damage that this government has done doesn't permanently taint future Australian governments and the ability for Australia's to have access to cheap capital.

[Work Horse]

Originally Posted by cheap

The falling dollar is very related to the just announced budget deficit. This government repeatedly promised a surplus and the poof there is another deficit.

The markets have lost patience with this government and have voted with their cash, the once 'safe' haven that Australia was is not so safe - hence the market is selling the $AUD and finding somewhere else.

The market doesn't like doesn't like being told one thing and getting something different. This exactly the sort of nonsense that befell Greece, where the Greeks were lying through their teeth about their financial position, when the truth became know there was a run on their banks and now they're in deep poo.

Now I'm not saying Australia is like Greece, but I just hope the damage that this government has done doesn't permanently taint future Australian governments and the ability for Australia's to have access to cheap capital.

The value of the Australian Dollar and the performance of our economy are the envy of the developed world. They are so far removed from what happened in Greece it's laughable you bring them up in the same post.


It has next to nothing to do with what a few hundred elected representatives are doing in Canberra(what ever side they are from
). And everything to do with what the rest of us are doing

GET OVER IT.....

[cupic]

Originally Posted by damoose

Personally I would like to see it at about 70c . That would at least give any manufacturing we have left a fighting chance of being price competitive.

Manufacture is dead its been sold to O/S so its a dead fight
Best times where the 60's and 70's

[mik]

Originally Posted by Work Horse

The value of the Australian Dollar and the performance of our economy are the envy of the developed world. They are so far removed from what happened in Greece it's laughable you bring them up in the same post.


It has next to nothing to do with what a few hundred elected representatives are doing in Canberra(what ever side they are from
). And everything to do with what the rest of us are doing

GET OVER IT.....

i dont know that our picture is as rosey as you paint it , while perhaps some of the economy is keeping its head above water, other parts are not doing so well, perhaps as you say some other countrys look at oz with envy, but some of these countries are so deep in a poop a homeless guy with a fresh maccas crust out the dumpmaster might look like bill gates.
An article i read last night said the current bunch at the helm have spent our future fund and the actual country debt might be more like 200 billion, the tone of the article was we are on very thin ice and should stuff happen we might be down looking for a maccas crust as well.

[cheap]

Originally Posted by Work Horse

The value of the Australian Dollar and the performance of our economy are the envy of the developed world. They are so far removed from what happened in Greece it's laughable you bring them up in the same post.


It has next to nothing to do with what a few hundred elected representatives are doing in Canberra(what ever side they are from
). And everything to do with what the rest of us are doing

GET OVER IT.....

Over the past 12-18 months official cash rates have fallen but the value of the dollar has surprisingly risen. However with the recently announced rates cut the dollars value fell - why?

Surely it wasn't this rate cut alone that caused the fall, because we would have expected to see devaluation with every previous rates cut over the past 12-18 months.

You claim that the Australian economy is the envy of every other country (Hmm I've heard that before from someone else) then surely the value of the dollar wouldn't fall - would it?

If the Australian economy was truly as strong as is claimed then why is the budget in deficit and forecast to be in deficit for at least the next 3-5 years?

What were we told about bringing in surplus - wasn't it a rock solid guarantee surplus given to everyone (including the markets)?

Here are some the reasons I can think of that would cause devaluation of a currency:
1) printing more money
2) lowering interest rates (but why didn't that happen over the past 12-18 months)
3) the markets lack of confidence (being lied to)
4) massive market manipulation
5) better returns elsewhere

So you tell me why the dollar has fallen and why, maybe you know something most of us don't - please share.

Finally there is no need to shout, we can read your comments and can make appropriate assessment of them, reverting to shouting seems to indicate that you haven't a clue. Over to you, looking for a thoughtful and technical response to explain.

[jpd80]

Th weakening of the Aussie dollar could be concurrent with two things,
a reduction in official interest raates and a strengthening of the US economy.

Make no bones about it even though the US has massive debt, their economy's
capacity to pay is governed by the level of economic activity and if the US housing
industry and Auto industry are barometers for the US economy, then I predict
that the US dollar will rise in value against all other currencies in the next twelve months.

[Work Horse]

Originally Posted by cheap

Over the past 12-18 months official cash rates have fallen but the value of the dollar has surprisingly risen. However with the recently announced rates cut the dollars value fell - why?

Surely it wasn't this rate cut alone that caused the fall, because we would have expected to see devaluation with every previous rates cut over the past 12-18 months.

You claim that the Australian economy is the envy of every other country (Hmm I've heard that before from someone else) then surely the value of the dollar wouldn't fall - would it?

If the Australian economy was truly as strong as is claimed then why is the budget in deficit and forecast to be in deficit for at least the next 3-5 years?

What were we told about bringing in surplus - wasn't it a rock solid guarantee surplus given to everyone (including the markets)?

Here are some the reasons I can think of that would cause devaluation of a currency:
1) printing more money
2) lowering interest rates (but why didn't that happen over the past 12-18 months)
3) the markets lack of confidence (being lied to)
4) massive market manipulation
5) better returns elsewhere

So you tell me why the dollar has fallen and why, maybe you know something most of us don't - please share.

Finally there is no need to shout, we can read your comments and can make appropriate assessment of them, reverting to shouting seems to indicate that you haven't a clue. Over to you, looking for a thoughtful and technical response to explain.

You wish to engage in political point scoring while pretending to discuss the falling Australian Dollar. I'm not interested...

The Australian Dollar was floated in December 1983.

The rise and fall of the Australian Dollar is not a barometer of how well the government is doing, the market determines its value.

The Australian Dollar is historically high at the moment and has been for a prolonged period. It is really hurting some parts of the economy including manufacturing and exports.

It is not a matter of if the Australian Dollar will come down but when.

We are talking about the Australian Dollars exchange rate against the US dollar. I would suggest the rate has way more to do with what is happening in the US economy and next to nothing to do with the Australian government.

The recent fall in the Australian Dollar can be directly linked to recent signs of improvement in the US economy.

If the US economy continues to improve the Australian Dollar will continue to fall. There is nothing any Australian government could do about it.