Don

Have a look at this http://www.hifx.co.uk/members/quotes.asp

AUD and NZD have been all over the shop today vs GBP.

Any thoughts on where they're going?

CON

It looks like they are only going one way, unfortunately we are headed in the opposite direction.

Al H

It is August so even the traders are on holiday, which probably accounts for some of the volatility as the trading volumes will probably be quite low - this makes the rates more volatile. Also the markets seemed to be a bit confused by this weeks UK inflation report which gives a clue as to which way interest rates are going and when. So all in all, no one really knows what's going on and as to which way the rate is going, well who knows....

Alastair

Don

I reckon AUD has peaked (or near) vs USD. But then, GBP is close to peaking, too.

AUD/ GBP could be dead interesting to watch.

alison_g

hello
My husband also watches the dollar daily and appears to have become quite an expert!!! he reads the daily business section in the Courier Mail which has recently stated that it expects the dollar to weaken near the end of the year, good news for us here waiting to buy dollars.. apparently they reckon that the US will increase their interest rates and if the US economy is strong it normally means the US dollar will strengthen and the AU dollar will weaken - good for us.... I think I am rambling...

Anyway I'm not going to panic, he's been on the ball so far with his predictions and if he gets it wrong he won't be buying that new car in Oz!!!!!!!!!

If there are any traders out there with expert info. let us know whats gonna happen.....

Alison

Don

I tend to agree with the following comments from http://www.dailyfx.com/currency_gbp_thomson.html for Friday.

IMO this means GBP weakness is around the corner.
The British pound is just riding the dollar bear wave today as it rallies towards the top of its recent range. Traders should be wary of forgetting the recent negative data that we have seen from the United Kingdom. Next week should be no different. We start off Monday with the RICS house price balance. In the month of June, the RICS survey fell sharply from 44 to 17. Given the harsh warning by the Bank of England of a sharp deceleration in house prices, consensus estimates are for a further decline to 10. The only other release from the UK is retail sales on Thursday, which is also expected to dabble into negative territory. Although the BoE Inflation Report has given us plenty of insight into the central bank's updated outlook, on Wednesday, we are expecting the minutes from the monetary policy meeting earlier this month. It will be interesting to see how many members may have voted in favor of keeping rates unchanged, if any at all. Either way, it should confirm that the end of the UK's glorious tightening cycle is in sight.

CON

What does that lot mean in terms a 10 year old would understand? I'm not thick, honest.

Brizbound

Heads or tails .....

CON

Thats how we are looking at it. We will sell our house for X amount and exchange the proceeds at whatever the rate is at the time (We have registered with HIFX) our house could get the asking price or (More likely) around £5-10K below, once you factor in an exchange rate that could be anywhere between 2.4 - 2.7 the difference becomes a huge amount. We will just have to hope we get top Dollar for the house and the exchange rate works for us at the time.

Brizbound

Exactly the point. If anyone knew what the fx rate would be in 2 months (or even 2 days) time they would be very very rich people. The best estimate for tomorrow's rate is today's rate.

Best of luck with the house sale and whatever rate you get. We were chuffed and exchanged our money a couple of weeks ago.

MikeStanton

Don't look at day to day movements, look at the next 3 months.

UK interest rates are likely to increase a little over the next 3 months, but it all depends on house price inflation and the relative US economy performance. My feeling is that any small UK interest rate increases for the next 2 months have already been factored in to the markets and hence the exchange rate. What has probably not yet been factored in is an Oz interest rate hike - this is likely to occur by end-2004/early-2005 - after the Oz election.

So, this all means that the UK:Oz exhange rate is llikely to be reasonably stable for the next 2-3 months and then move in Oz's favour towards the end of the year.

My forecast/guess () for $A:GBP: 2.5-2.6 until October'04, then 2.3-2.4 by Dec'04/Jan'05.

If UK housing price inflation doesn't slow quickly enough, the latter figure will still be 2.5-2.6 by end-04

Don

You don't have to do it that way.

You could forward buy (say) half what you intend to exchange now by paying a 10% deposit and fixing the rate at today's rate. Pay the rest on contract completion date. 3, 6 and 12 month forward contracts are typical.

Then exchange the other half when you sell the house.

This strategy would take out half of the worry of the exchange rate moving against you later - but of course you wouldn't get all the benefit if the rate moved in your favour in future.

Brizbound

You would also need to be very certain you had the cash for the 90% remaining on the contract. V. high risk in the UK unless you have exchanged contracts.