What's your prediction on the Australian Dollar?

[33kft]

Sydney/Melbourne residents will collectively realize that paying 1.5 million for a weatherboard crackshack was quite absurd.

They never were, they were paying 1.4 million for land that the weatherboard crackshack sat on, 5km from the city. In many cases, that weatherboard crackshack got razed and a set of 20m apartments built where it lay. If this is the foundation on which your economic analysis sits I think it may be on shaky ground.

 

[Danger]

There have been some significant gains for the Australian dollar over the past few days, including against the USD, SGD, EUR, GBP and MYR. Against the USD, our dollar is now only down 0.63% over the past year and 0.1% for the EUR. It's also up 0.11% against the GBP and 1.7% for the SGD.

We must be overdue for an expert to claim 'Aussie can go to 80 cents by Christmas' or similar.

 

[cove]

Trumpie is really helping us this week. We bought at 0.6965 on the US and 0.6205 on the Euro. To think we had 0.55 on the USD recently it is a great rally.

 

[MEL_Traveller]

We had 0.574? A couple of weeks ago would have been nicer for all my refunds to come back from the airlines!

 

[cove]

At 0.7030 I looked at buying AA miles on their latest offer. It works out at 2.5 cents a mile and we still have lots in our accounts.
AA Miles helped us exit London in a hurry in March.
I think we can wait as London and Los Angeles have not improved with COVID-19

 

[Cruiser Elite]

So the little Aussie bleeder has had a peep over 70c - 99% confident we are heading back to parity or better

Gotta love the Chinese and their thirst for iron ore huh?

 

[cove]

Yes $AUD is trying to rise. We are saving $38 billion on travel and gold and iron ore are both doing very well.
The $US is looking like tanking over the next couple of years.

 

[Cruiser Elite]

We are saving $38 billion on travel

Dont forget the 60 bill $ Jobkeeper saving courtesy of Josh failing Rifmatic 101

 

[cove]

I think that $60 billion was a Twesury calculation and they were out becos there were no ciggie packs to do the rifmatic.

 

[pgsdiver]

99% confident we are heading back to parity or better

Go you good thing, as far as I'm concerned. My (entirely selfish) interests are served well by the rise of the $A.
Not necessarily great for the broader economy though. But I'll help support that by spending more on smashed avocado if it goes up.

DISCLAIMER: I actually hate smashed avocado.

 

[ethernet]

Yes $AUD is trying to rise. We are saving $38 billion on travel and gold and iron ore are both doing very well.
The $US is looking like tanking over the next couple of years.

The AUD is regaining ground against the CAD, yet AUD is running a trade surplus. I suspect invisibles have also tanked and not buying as much imported building materials as new construction has tanked strongly.
The RBA intervenes strongly at 74-76 cents. My investment newsletter poll suggests 69-73 at years end. The elites and hedge funds are betting the bank on Euro to rise against USD.

I also hear it is difficult to transfer money out of Australia when your Australian passport expires, and you become a non-person because you are covid trapped overseas.

 

[MEL_Traveller]

Not necessarily great for the broader economy though.

in my very simplistic view of things... I wish people - and it's usually business people - would stop saying a high dollar is bad for the economy.

I mean, when the dollar was low, it didn't help did it? Companies were still crying poor. Foreign workers were required, at lower wages, we were told. Call centres had to go off shore. Penalty rates had to be scrapped, along with public holidays because 'we can't afford the cost of doing business'.

Meanwhile the average person pays more for airfares, more for overseas travel, more for accommodation while we're away. More for food and drink. More for tvs, cars, petrol and everything else.

So like who exactly 'benefited' from the lower dollar? No one it seems. The average person was miserable (and a hint... if we wanted to holiday in Australia, we would!) The 'business' folk in the Qantas first class lounge, having a facial before their salt and pepper squid would have us believe they weren't happy either.

 

[pgsdiver]

So like who exactly 'benefited' from the lower dollar?

Exporters.
BUT....To clarify my comment, what I meant was a higher dollar wouldn't please everyone in the economy, not that it was broadly bad for the economy.
But I hear you, friend, the lower dollar does hurt most of us consumers.

 

[cove]

We do better with a lower $AUD but we feel happier when our dollar is not crumbling.
For us stability is what we prefer but our currency is heavily traded in the world markets so stability is not possible.
Australia has been running large trade surpluses and has stopped the immigration ponzi due to COVID-19.
$AUD is now likely to test the upside in the next couple of months.

 

[SydneySwan]

So like who exactly 'benefited' from the lower dollar?

Investors in unhedged overseas assets, e.g. American shares, property, etc.

Of course those assets have to perform and you need to cash out before the little Aussie battler rebounds.

 

[MEL_Traveller]

Investors in unhedged overseas assets, e.g. American shares, property, etc.

Of course those assets have to perform and you need to cash out before the little Aussie battler rebounds.

yeah I just seem to be missing the benefit to the little aussie battlers!

 

[kpc]

As the AUD races past the USD 0.71 barrier, I have absolutely no OS trips to take advantage of this I could TF some AUD into my USD bank account...

 

[cove]

@kpc just put another storey on your home. COVID-19 is not going too well so our trips to San Antonio, Salt Lake City and Los Angeles are currently a NO.
Maybe Long Beach in November 2021.
My sons still want to book Tokyo for the delayed Olympics.
We bought some above 0.71 so that probably put a floor on our currency.

 

[RAM]

As the AUD races past the USD 0.71 barrier, I have absolutely no OS trips to take advantage of this I could TF some AUD into my USD bank account...

or if you are enough of a gambler (planner?) there's an easier & much more lucrative way to do it.

THIS IS NOT PERSONAL FINANCIAL ADVICE - consultant your financial advisor

You could use a service like OFX to buy the USD.

Step 1: Set up account & ensure you are permitted to transact 'Forwards'.
Step 2: Buy the USD spot and then ask to roll it say 1 month as a forward.

Traditionally this meant you received slightly less USD in the future due to interest rate differentials (US rates below Australian). These days it is flat or US rates below (depending on the maturity). Now virtually the same as far as you're concerned.

Chances are you will be required to lodge a deposit (to cover potential losses if AUD continues to strengthen). Meanwhile you take advantage of the offers by several Australian Banks for 3 or 4 month bonus interest on 'at call' accounts - currently > 1.5%

So if you're buying a big enough amount of USD then you're earning 0.12% a month by entering into a forward contract. Your position is EXACTLY the same as if you'd bought it spot and put it into a USD bank account - if the AUD continues to strengthen then you are effectively losing money, but if you want to lock away a certain amount and are happy at a certain USD/AUD exchange rate - then this may be a good idea.

You are taking all the risks. If say you'd done this in April you could have effectively lost more than 20% compared to what you would receive now.

IF the USD/AUD heads to 0.80 then in hindsight it would be a bad decision to buy now...

Seek your own personal financial advice!

 

[ithongy]

How about using Cryptocurrency...?

or if you are enough of a gambler (planner?) there's an easier & much more lucrative way to do it.

THIS IS NOT PERSONAL FINANCIAL ADVICE - consultant your financial advisor

You could use a service like OFX to buy the USD.

Step 1: Set up account & ensure you are permitted to transact 'Forwards'.
Step 2: Buy the USD spot and then ask to roll it say 1 month as a forward.

Traditionally this meant you received slightly less USD in the future due to interest rate differentials (US rates below Australian). These days it is flat or US rates below (depending on the maturity). Now virtually the same as far as you're concerned.

Chances are you will be required to lodge a deposit (to cover potential losses if AUD continues to strengthen). Meanwhile you take advantage of the offers by several Australian Banks for 3 or 4 month bonus interest on 'at call' accounts - currently > 1.5%

So if you're buying a big enough amount of USD then you're earning 0.12% a month by entering into a forward contract. Your position is EXACTLY the same as if you'd bought it spot and put it into a USD bank account - if the AUD continues to strengthen then you are effectively losing money, but if you want to lock away a certain amount and are happy at a certain USD/AUD exchange rate - then this may be a good idea.

You are taking all the risks. If say you'd done this in April you could have effectively lost more than 20% compared to what you would receive now.

IF the USD/AUD heads to 0.80 then in hindsight it would be a bad decision to buy now...

Seek your own personal financial advice!