bcworld

Time for an exchange rate thread?

Any bets on $2!?

commonwealth

i'll wait for the end of QEII

Alfresco

Yep, within 6 months.

TheCreature

I can't see any logical reason for the climb. While the UK is starting to come out of recession its debt is still enormous. Close to 1.3 Trillion. !!

Probably a good job I'm not a forex trader.

chris955

It makes sense, the UK economy is actually well out of recession and growing faster than expected. I said we would see $2 within 2 years but it may come much sooner than that.

chris955

We should also remember this is largely down to various negatives re the economy in Australia.

OzTennis

Actually it's largely down to:

"a steady campaign of jawboning by the Reserve Bank has sent the Aussie on its latest lurch lower. Today’s weaker growth data gave investors a fundamental reason to step up bearish sentiment. At the margin, the data underlined how interest rates in Australia may have yet to hit rock bottom."

In other words, Glenn Stevens has consistently for the last few months been trying to 'talk the dollar down'. Yes, latest quarterly GDP figures a part of this but it's mainly about expectations among investors. These are self-fulfilling prophecies. If Stevens keeps saying the dollar needs to come down (to stimulate exports and jobs etc) and there are hints of possible further interest rate cuts then investors act accordingly and adopt a bearish attitude.

Incidentally, with the dollar falling about 8.6% in the last few weeks on this sentiment:

Property and prices in Australia fell 8.6% when measured in £'s. A move from say London to Sydney got nearly 10% better/easier in a blink. Put another way, Sydney median house price $690K was £408K a few weeks ago; £381K today and heading southwards on this bearish market.

TheCreature

Never thought I'd see those two words in a sentence from you Chris.

Amazulu

Bollocks as usual

It's more to do with the USD and the tapering off of QE in the US

commonwealth

Errr. The AUD is overvalued to begin with, which is causing a drag on the economy. That's why the RBA is actually talking it down.

Molly Coddle

£1 = $1.88 today.

Do you think we will see £1 = $2.00 this year?

Alfresco

Wow! We got 1.75 in July last year.

Very possibly.

old.sparkles

1.45 in April (wish I wasn't good at mental arithmetic )

GarryP

Well, if you take a chartist view of it, it would rise to ~$2:£1 in May.

However things are much more likely to be driven by news events. Possible drivers could be:

• Russia invading Ukraine and there being economic fisticuffs as a result. Given Putin that's got to be very likely, quite soon.
• China's credit bubble bursting. Since it seems to be held up with hot air and secrecy, that's seen as a question of when, not if.
• More 'good news' from Abbott and his cretinous crew. It's noticeable that lots of sizeable companies in Oz are getting rid and getting out since he got in - almost as if they know something is coming. Given a May Hockey budget is already being touted as 'hard', we are likely to see something really dumb, like unforced austerity.

I'd put my money on May for things going over $2:£1, if we don't hit it sooner.

paulry

I reckon it'll be around 2 to 1 by mid year and the trend will continue until about 2.2/2.3 to 1 by the middle of next year. But perhaps that's wishful thinking