isgraham

Well I've just bitten the bullet and sent my savings back to the UK the mortgage is now going to be paid off courtesy of the recent stock market rally and the collapse in the pound. Ah mortgage free life I've had to wait 6 years for that.

MartinLuther

I do like to hear what Mr Cro (and yourself) have to say. You both give good opinion.

I notice sally's being a bit quiet.

louie

So where do you reckon we are heading now MartinLuther? I'm inclined to put my money where your mouth is given your past predictions

mindblower

[QUOTE]

No base in the the chart yet, so down, deeper and down.

craig_m67

well done that man


do we have a clapping emoticon?

lee_h

Today 1 dollar buys 57 pence.

Is this just a freak rise that will suddenly crash back down? With interest rates predicted to rise further, we may see this reach 60.
Any predictions from those in the know?

stuckinblighty

Theres plenty of experts on this site,all saying different things.

MartinLuther

My gut feeling is still down at the mo. I don't think that it'll go below 1.60 (although I've not been good at calling the bottom in the past). After that I'm not so sure. It's hard to see, at the moment, how the UK government can put any value back into the £. So that leaves a weakening of the $ as the means to getting a higher rate. This will come eventually but I don't think it'll be huge.

Centurion

At this rate the Zimbabwe dollar will be a better a investment

In November there will be new economic forecasts in the UK. Quantitive easing is tipped to continue. Economists predicting the Euro/GBP at 89p at the end of the year.

http://www.thisismoney.co.uk/markets...=3&expand=true

My thinking is this is a really long and slippery slope and its going to go past 1.6. And where that leaves Sterling who knows. But wherever it is, one thing for certain, sterling will have to find a new place in the world order and thats a lot lower down the food chain in currency terms.

I really don't see it recovering any time in the next few years, if ever. To my mind the very basis of the UK economy as a service industry provider has suffered too much and the BoE wants to try to shift focus to manufacture and exports. Whereas Australia is comparatively moving from strength to strength in a ship sails on fashion. Funny how the heralds of Australia's doom seem to have become real quiet recently.

So my money is on the AUD at present and supported by the generally accepted shift to Asia and the Australasian region as the new powerhouses.

MartinLuther

It was interesting to see that there is talk about trading oil in a basket currency made up from Euro, yuan, yen and gold. The US$ is obviously losing it's influence which in turn, I think, will affect the £ which trading-wise tends to be influenced by the US$

iamthecreaturefromuranus

Try putting your salary in on XE and converting it back into pounds. You may well be shocked at just how much it comes out at. These exchange rates must be making Australian staff look more and more expensive. Not a good thing long term.

DownUnderPaddy

No experts here, but plenty of opinions !

Rather than thinking of it as a freak rise, look at the graph of the rate for the last 3 years.
I suggest that the brief interruption (for approx 1 month last year) of the ongoing decline in value of GBP/AUD was the freak. The declining value in the GBP (relative to the AUD) has been a steady ongoing trend for quite some time now and really is the rule rather than the exception at this point.

Right now, the economy of the uk is in very poor shape, and the economy of Australia is in relatively good shape. As long as that scenario continues, what evidence really exists for anything other than an ongoing extension of the downward trend of the GBP/AUD rate ?

Obviously at some point, the UK economy will improve and the AUS economy will hit its own hurdles and the trend will probably reverse.

Will that be in the next few months though ? I don't believe so (is my non-expert opinion anyway !)

koalakim

I think over the last couple of months we've all become forex experts!

As Paddy says the Oz economy is doing well at the moment the UK is improving slightly but not enough to get the markets excited. The low interest rates in the UK won't attract foreign investors and it looks like they will remain low until the general election unless inflation starts to take off again. The BoE QE is still in place suggesting that stimulus is still needed however, if the banks would start lending again to small business and home owners then there would be more money flowing which would help the economy. Their tightning up too much is giving small business a hard time at the moment and if it was a business that exports then this is the time they should be taking advantage of.

To be honest I can't see anything at the moment to suggest that the pound will strengthen against the A$ to what we would call a normal rate - certainly not unless Australia goes belly up or the UK has a miracle or there could be a spike if a new government gets in - a moment of confidence!

It's really hard at the moment, we have just sold our UK property and want to buy in Oz as after 3 years we need our own place. We are faced with the dilemma if we wait for the pound to strengthen then Aussie houses will have gone up so much that will wipe out the gain anyway! Where we live in Melbourne the prices have not been affected by the downturn and are still rising. We had hoped for just a small mortgage but now we are looking at being saddled with another big one just to get a decent place and I'm not talking about a huge McMansion here!

Aus is riding high at the moment and of course all economics are in cycles so at some point there will be a correction but you might have to wait a while!

Certainly in the short term I can't see much improvement but it depends on your circumstances and how long you can hang on for. I have learnt in the last couple of months of Pound Watching that we are just tiny wee pawns in the great forex game. Maybe the forex traders would like to pay my mortagage

Good luck with whatever you decide to do!

KK

lee_h

Fortunately i am already in australia (7 yrs ) and do not need to exchange any currency. I suppose it still affects us all in some way or another. For some reason i feel better off when the aud increases because i compare what i have with pounds. I'm sure this is a false indicator as a dollar is still just a dollar. Obviously you get the benefit when you go on holiday to the uk but i'm not sure if there are any other real benefits. It's interesting at the very least anyway.

Budawang

The key is how long the Aussie dollar will remain strong. If it goes on long enough this will start putting downward pressure on inflation. Cars and other big ticket items may actually drop in price. If this strength is sustainable (a big if) then it will mean higher living standards for Australians.