What's your prediction on the Australian Dollar?

[RSD]

I gave up faith in the AUD as it fell behind Canada and NZ - and even GBP that deserves a Keating S-Bend correction. I moved a large chunk into gold ETF (PMGOLD) years ago with three monthly increases and some to a US credit union at 67 cents or better paying more interest as well. Only to discover USA hotel prices are through the roof in refugee cities like NYC. I suggest super funds will NOT be building housing, given no building inspectors seem to do their job strictly. Oh the body corporate fees for (balcony concrete rot), roof leaks, structural cracking, and now pets, and rent caps. This will continue - as retirees don't believe the numbers being told.

Hard to believe that three months ago the dollar was creeping above 69 cents....

 

[ethernet]

Hard to believe that three months ago the dollar was creeping above 69 cents....

I once compared 5 year performance of Philippine Peso Vs AUD. It seems certain retired pensioners there have not lost, and their bank accounts totally secret, with healthy interest. Back to gold, a 31% odd return in a year - not bad at all. BTW the banking multiplier for loaned money also tanks if more people stick 5% in precious metals.

 

[I love to travel]

Aussie has dropped quite a bit in the last 2 hours. Not sure why.

 

[cove]

Must have heard that we are going to the US two or three times in 2025. It is possible the RBA may consider cutting their rate by a tad in February. Our 4.35% rate could come off by 0.25%.

 

[earlyriser]

The FX markets are waiting to see what Trump does once he starts. If he brings in some tariffs right away, expect more USD strength and pain for everyone else. If he indicates he will go slow and targeted (as he has been suggesting lately), the AUD should pop a little. If he walks his threats back a lot, then 65+ will come quickly IMO.

 

[moa999]

Trump seems to ignore the impact any counter tariffs might have.
Eg. China saying if you tax our cars, we will tax your planes (impacting Boeing for example).

I'd have thought this would impact aviation, defence and pharmaceuticals most - all groups with big political power.

But yes we are currently looking like Aussie peso territory.

 

[MEL_Traveller]

Trump seems to ignore the impact any counter tariffs might have.
Eg. China saying if you tax our cars, we will tax your planes (impacting Boeing for example).

I'd have thought this would impact aviation, defence and pharmaceuticals most - all groups with big political power.

But yes we are currently looking like Aussie peso territory.

lol. Surely the tariffs would only bite when boeing actually delivers a plane

 

[p--and--t]

lol. Surely the tariffs would only bite when boeing actually delivers a plane

China has started flying its own home grown planes just recently. If they are a success then Boeing (and AB) might have more to worry about than a tariff.

I would think the farmers of US have a lot to lose if a tariff war breaks out.

 

[RAM]

Trump seems to ignore the impact any counter tariffs might have.
Eg. China saying if you tax our cars, we will tax your planes (impacting Boeing for example).

I'd have thought this would impact aviation, defence and pharmaceuticals most - all groups with big political power.

But yes we are currently looking like Aussie peso territory.

There's quite a bit of dis/mis-information about currently.

Has the MSM mentioned that Biden INCREASED tariffs on China after he came into office? So that typically there's now a 16% or so tariff on anything from China (most things)?

Where do these tariffs go? Straight into the US Govt's bank account...

Back on topic - China has no realistic alternative to buying Boeing planes (as well as Airbus planes) since Airbus is booked out virtually for most of the next decade.

Adding tariffs on Chinese made goods, theoretically to offset the CCP's subsidies to Chinese manufacturers, smelters, etc (CCP announced back in 2005 (IIRC) in that 5 Yr plan they would become the world's refiner of 'rare earth elements'. The CCP provided mega subsidies, zero interest loans, free parcels of land and ZERO discharge requirements for the waste materials to these 'national champions'.

Result - pretty much drove every Western-owned rare earth elements (metals) refinery out of business within four years.

Similar result with steel and stainless steel hence the issue with Japan buying one of the last US steel makers. Where does the US get the titanium for their fighter jets and 'B' series bombers from?

For some reason MSM rarely, if ever, reports the translated excerpts from the CCP's Five year Plans about creating and supporting national champions. A bit like the lack of reporting of CCP school syllabus teaching about the 'Century of Western Powers humiliation of China' rubbing China's 'face' in the dirt (about Macau & Hong Kong).

Yet for some reason, relatively there's been quite a bit about Japan & their school syllabus.

 

[Lynda2475]

As usual a certain public figure hasn't properly thought through the consequences of his threats. Almost 50% of US Oil & Mineral imports come from Canada. In a cost of living crisis I imagine huge push back if peoples energy bills and transport costs suddenly increased by huge amount.

 

[MEL_Traveller]

As usual a certain public figure hasn't properly thought through the consequences of his threats. Almost 50% of US Oil & Mineral imports come from Canada. In a cost of living crisis I imagine huge push back if peoples energy bills and transport costs suddenly increased by huge amount.

He’s gonna allow oil drilling in the Gulf of America - supposedly.

But interestingly on wanting to make Canada a state, commentators pointed out that with 40 million voters it would come with a swag of electoral votes, which would almost certainly be democrat.

So that one’s unlikely to happen!

 

[Franky]

He’s gonna allow oil drilling in the Gulf of America - supposedly.

But interestingly on wanting to make Canada a state, commentators pointed out that with 40 million voters it would come with a swag of electoral votes, which would almost certainly be democrat.

So that one’s unlikely to happen!

He previously promoted and allowed fracking on the US continent, which at the time, made the US an energy exporter for the first time, instead of having to rely on the Venezuela and the Arabs.

 

[burmans]

While I agree the downward pressure is down short term, there is a strong push from the US technobros to make crypto currency an official world currency and to date Trump has been supporting it.

If this were ever successful (and weirder things have happened) and the USD loses its stranglehold as the de facto world currency it’s hard to see the USD doing anything other than plummeting.

 

[Lynda2475]

Even in markets where the AUD isnt at peso levels travel hasn't exactly gotten cheaper.

In 2019 AUD $100 got you on average JPY 75, now it gets you closer to 97 JPY but due to over tourism, a foreigner tax means the costs of hotels has increased by more than 20% so not really any cheaper to visit.

 

[clifford]

it’s hard to see the USD doing anything other than plummeting.

I think that's a brave prediction given the world's holding of the currency.

Wouldn't the proliferation of bitcoin, dogecoin (!) et al just further support the value of the USD.

There's really no alternative (short of a nuclear war).

 

[burmans]

There's really no alternative (short of a nuclear war).

Well that’s the whole thing, there’s no alternative now but that is precisely what’s being proposed and smarter people than me regard it as a possibility (though not a probability). Unusually in this case the push is coming from within the US and from some very influential people.

I know most of us don’t know of anything else but it’s a relatively short timeframe that the USD has held this role so it has changed before and it could change again.

There are also incidentally pushes for other world currencies. None seem to have got significant traction yet, but they do have not insignificant forces behind them and you’d have to be somewhat ignorant of world history to totally rule it out.

For myself while I don’t see it happening quickly American world influence is already on the decline, and actually has been for some time, so am reluctant to rule out an eventual decline in the USD as the dominant world currency.

 

[Lynda2475]

Well that’s the whole thing, there’s no alternative now

There can easily be an alternative. If people were to decide they trust (see the as more reliable) the Euro or GBP or another currency, it can become the currency of choice and over take the USD in places that dont have their own currency like Ecuador.

One could also argue that Gold (or another precious metal) could be the alternative.

Noting that as recently as 2011 there was a period the AUD was worth more than the USD. Currencies fluctuate, I dont see that changing unless the whole world moves to a single currency.

 

[p--and--t]

Well that’s the whole thing, there’s no alternative now but that is precisely what’s being proposed and smarter people than me regard it as a possibility (though not a probability). Unusually in this case the push is coming from within the US and from some very influential people.

I know most of us don’t know of anything else but it’s a relatively short timeframe that the USD has held this role so it has changed before and it could change again.

There are also incidentally pushes for other world currencies. None seem to have got significant traction yet, but they do have not insignificant forces behind them and you’d have to be somewhat ignorant of world history to totally rule it out.

For myself while I don’t see it happening quickly American world influence is already on the decline, and actually has been for some time, so am reluctant to rule out an eventual decline in the USD as the dominant world currency.

US has been on the decline for s loooong time. It will be very interesting to see if the upcoming white house shakeup will make things even worse for both them and the world economy or initiate an unlikely surprise turnaround.

 

[burmans]

US has been on the decline for s loooong time. It will be very interesting to see if the upcoming white house shakeup will make things even worse for both them and the world economy or initiate an unlikely surprise turnaround.

Well my view is that this is the US’s Brexit moment with an outcome likely to be similar. I get the desire to make America (/Great Britain) great again but both of these actions seem like little more than wishful thinking. And we know how successful that has been for the UK and I have yet to see any reason it will be different for the US. Patriotic talk and bluster attracts votes but doesn’t actually achieve much.

 

[cove]

Having travelled to the US when the Aussie dollar was under 50 cents for a few days Chicago was quite expensive. What I know is that anything is possible and it is mostly based on buyers and sellers of our currency.