Aussie dollar on the turn
 

Patience will be rewarded - taken from Bloomberg this morning. Just wait until post the Bejing olympics slowdown kicks in. Aussie is a little boat in a large ocean and can move quickly when the fundamentals turn.

Commodities Decline

The Australian dollar fell to the lowest in two weeks as Credit Suisse indexes showed traders added to bets for the RBA to reduce its benchmark by 25 basis points in the next 12 months, compared with 11 basis points yesterday.

The currency also weakened as the price of gold, the nation's third-most valuable commodity export, dropped the most in more than six weeks yesterday. Exports of raw materials contribute about 17 percent to Australia's economy.

``For commodity currencies, it appears the writing is on the wall for a sharp pull back,'' wrote London-based Stephen Koukoulas, head of global foreign exchange and fixed-income strategy at TD Securities Ltd., in a research note. ``A weaker commodities outlook will undermine support'' for the Aussie.

New Zealand's government bonds rose, pushing the yield on the 10-year note down 5 basis points to 6.13 percent. The price of the 6 percent security maturing in December 2017 climbed 0.368 to 99.054. A basis point is 0.01 percentage point.

Australian bonds advanced for a second day. The yield on the 10-year note fell 5 basis points to 6.40 percent. The price of the 5.25 percent security maturing in March 2019 gained 0.336, or A$3.36 per A$1,000 face amount, to 91.243.

Re: Aussie dollar on the turn
 

Yeah the GBP was having a nice run up against AUD until those retail sales numbers came out in the UK....now crashing back to earth (along with the retail sales!).

Re: Aussie dollar on the turn
 

Interesting to watch this over the next few weeks. If oil continues to slide I could be persuaded the MPC might keep UK rates on hold, even though a rise is drastically needed.

Re: Aussie dollar on the turn
 

Another article picking up on the possible reversal of aussie dollar. Good news for those with funds although bad news for those that need to find work when you get there. Aussie recessions are brutal given the low margin nature of the economy and costs are slashed hard.

http://www.telegraph.co.uk/money/mai...30/cnoz130.xml

Re: Aussie dollar on the turn
 

this is definately good news for people transfering their funds to OZ , still a russian rullette end of the day, do you hold out and hope you get more for your ponds or do you send the funds over.:(

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I read this article earlier and I think most of it is a load of crap. 'The Aussie's going down big time' it states. Well, the AUD has gone from 0.98 to the USD to 0.95 in a week. Big drop that. Some of the banks have taken some big hits but i bet most of them still make billion $ profits this year - $2-3b compared to $4b for instance. Coal, iron-ore, LNG and food prices are, mostly, still at record highs. Many new resource projects are coming on-stream this year - causing a huge increase in royalties flowing to Canberra and the states. Queensland, WA and NT are still booming.

I think the Telegraph is having a slow news day.

Re: Aussie dollar on the turn
 

Be careful what you transfer to Australia. The Australian government does not guarantee funds like the US and UK govts do. If there's a run on a bank you could lose the lot.

I don't share your optimism, Amazulu. I think the over-valued Aussie property market is about to get what's coming to it.

Re: Aussie dollar on the turn
 

Maybe, maybe not, but this article is totally pessimistic about the whole Australian economy and I do not share that view at all.

Re: Aussie dollar on the turn
 

]
Had no choice but convert/xfer a chunk before recent rise...grrr
The chart shows sideways movement now in the 2-02 -209 range, if breaks through the 2-10 barrier could be on an upward trend. Cant seem to do this at the momment tho.

Hmm :confused:

Re: Aussie dollar on the turn
 

The CEO of National Australia Bank said something interesting the other day about Australian property prices along the lines that, yes, property is very expensive in Australia but, unlike the US, there isn't an over supply of housing. To put it simply, too many houses were built in the US. This, combined with crazy lending to people who were guaranteed to default means the US is in a much more difficult situation. Strong immigration and the mining boom means many of the overseas pundits have got it wrong when they predict Australia will follow the US down the negative equity gurgler.

The fact is the Australian economy has been (and is) much better managed than the US one. Aus has a budget surplus around 2% of GDP while the US has a 3 % deficit which is more like 4% except they don't count their "war deficit". Talk about shonky book-keeping.

Re: Aussie dollar on the turn
 

>>The CEO of National Australia Bank said something interesting the other day about Australian property prices along the lines that, yes, property is very expensive in Australia but, unlike the US, there isn't an over supply of housing. To put it simply, too many houses were built in the US. This, combined with crazy lending to people who were guaranteed to default means the US is in a much more difficult situation. Strong immigration and the mining boom means many of the overseas pundits have got it wrong when they predict Australia will follow the US down the negative equity gurgler.<<

Half yes: half No!

He's right in that there's no surplus of property - partly because of immigration - but the other side of the equation is whether people are able to actually *afford* the recent rediculous prices asked. More and more are finding they cannot, and more houses are being reposessed, driving the remainder down in a spiral. Not in all places, but I don't think we've seen the last of it by a long chalk.

Re: Aussie dollar on the turn
 

There is no over supply in the UK either but prices are still plummeting as people are not buying. This problem has got many causes and just because one does not apply in a particular country it doesn't mean that the same outcome will not occur.

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Is this what I sound like when I talk to people about cross-platform Optimistic Concurrency strategy implementations for NHibernate Object Relational Mapping ?

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Just do what i do, any spare cash, buy Gold ..........mm;)

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what a rubbish article...

"The retreat comes days after the Melbourne lender shocked the markets by announcing a 90pc write-down on its £550m holdings of US mortgage debt, an admission that it AAA-rated securities are virtually worthless."

Yet, it fails to mention that NAB's total assets are over $500bn !!! :D

This is the equivalent of you or I losing a couple of grand in the casino....and it is being held up as evidence in an article entitled "australia faces worse crisis than usa" !!! heh heh....

Re: Aussie dollar on the turn
 

I like The Telegraph, but this is a rubbish article.

Like I said earlier - a slow news day.

Re: Aussie dollar on the turn
 

I think it will return to its average 2.42 ,the chances of the Australian
dollar becoming the new big thing in currencies is a joke:)
its just a matter of time Just look at the Kiwi its a joke :)
Australia has a massive empty Continent to fill before it is in the
same camp as the majors ,as thay drop interest rates the RBA & RBNZ
the A$dollars will a come tumbling doon:thumbdown::thumbdown:

Re: Aussie dollar on the turn
 

http://www.portfolio.com/news-market...nk-CEOs?page=4

"The mortgage market is going to be a great market in this country for a long time. We've got population growth. We've got people who are always going to want to live in homes that they own. It's going to be a great market."

Re: Aussie dollar on the turn
 

The mortgage market is going to be great, only if they've got money to lend to would-be mortagee's....

The financial market is a global one and, as such is subject to changes in the global economy.

Even Europe have a load less money to lend than they used to and the banks there dabbled a whole lot less than UK ones in the USA sub prime lending....
Australia can't immune from that, surely?

BTW today the $ is at 2.1 to £ so it's definitely on the up... whether is carries on is yet to be seen, but that's what the economists are predicting.

Re: Aussie dollar on the turn
 

Totally agree... Last weeks Manly Daily showed a 6.75% year on year drop in prices in Mona Vale on the Northern Beaches, data from RP Data... And I reckon that's just the beginning... 20%-30% to go...

Re: Aussie dollar on the turn
 

Australia is currently where the UK was 18 months ago. The denial stage property prices are going down accross the board slowly at the moment but I expect that to pick up speed over the next year or so.

Regarding the slowdown in demand from China after the olympics, I wouldn't bet on that. China has big infrastructural plans and they are swimming in money so the resources boom could go on for some time yet.

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Why dont they peg AUD$ with CAD$,Euro or GBP instead of USD$?

Re: Aussie dollar on the turn
 

Worley Parsons, who I work for, have just got a new, $4b, iron-ore project in the Pilbara which is starting at the end fo the year.
WA government has just approved a new, $1.6b iron-ore port near Geraldton.
Yadda, yadda.

Boom still a long way to go.

Aussie dollar on the turn
 

Why is it that almost everything one buys in the shops has......somewhere............on it 'Made in China' ?

Re: Aussie dollar on the turn
 

..... and is generally crap.

I for one am sick to death of *having* to buy cheap Chinese made goods (because nothing else seems to be made any more) which fall apart in some way, have instructions that don't relate to the product, don't do what they purport to do - and end up in the bin.

I don't think I'm the only one, either.

Aussie dollar on the turn
 

Agreed, the thing that really cheeses me off is the fact that the clothes are made for Chinese consumption for Chinese people with (not surprisingly) Chinese bodies.

They just don't fit a hunk of a chappie like me.

Re: Aussie dollar on the turn
 

This is the first negative story about the Sydney housing market I've seen in the Herald.


Sydney house prices take a dive


S

Re: Aussie dollar on the turn
 

Hi Amazulu ,i have found this thread interesting .You tend to keep a more optimistic view of the australian economy which is good as i think now we are talking ourselves into a hole .
But i like you try to keep an optimistic outlook on the aussie economy ,but i have to i work in construction and we at the moment are really suffering ,i guess my income has dropped by 40% this year and with every single builder we work for got property unsold its only a matter of time before we are in the shite .
I know aussie has a thriving mining economy but obviously this really only effects the lucky few who are in it ,the cashed up employees of the mining sector arnt going to be the saving grace if the economy collapses due to tightening of money policies like what has happened in the uk .
The uk is now reliant on virtual cash buyers for property because people cant get mortgages ,if this happens in aussie the cashed up employees of the mining industry just wont be enough to kick start the whole merry go round again .
The mining industry at times really annoys me because all you seem to read is they cant get staff ,well i know heaps of people who wouldnt mind getting into mining including myself ,but cant get in because its a case of who you know and not what you know .
The lack of interest by mining companys in regards to training is beyond belief to me ,all they want is experience they dont want people who are eager to learn .
Australia is already a two tier economy annd thats not good for the country ,lets hope it changes soon .

Re: Aussie dollar on the turn
 

Exactly.

The mining boom is a great thing, and Australia is very lucky to be in the position it is. But the fact that the services sector is shrinking in both Qld and WA demonstrates that the revenues alone aren't enough to keep the wider economy going.

Re: Aussie dollar on the turn
 

I am optimistic about the Australian economy - I work directly in mining and I can see, more than most other people, where Australia's wealth is coming from - and will come from in the future. I'm a pretty optimistic person generally, definitely a glass half full person. :)

I guess the house building industry is suffering - and that's a bummer if you're affected. The commercial building industry - in WA and Qld at least - is still booming though. There are at least 20 apartment blocks being built in central Perth right now, and heaps more are planned. Same for office blocks - the biggest one ever to be built in WA is starting soon. Add to this the new stadia, waterfront, airport, museum, roads, container port, rail etc.....
House building may be in a slump but it will come back sooner or later. No consolation if you are hurting right now, but great for the future.

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Seriously, all this talk of the mining boom propping up Australia's economy is rubbish. What % of jobs are actually affected by mining money? A tiny amount I'll bet. Sure it's great if you want to move to the middle of nowhere in WA and earn $500k to drive a truck, but as far as the whole Australian economy is concerned it's actually peanuts.

Things are looking pretty bleak for Australia now economically. Things have turned much faster there than I anticipated and it looks like yet again Australia is going to suffer a much worse fate than both the UK ad the USA - even with this wondrous mining boom.:rolleyes:

Re: Aussie dollar on the turn
 

Agreed the housing will bounce back it always does and i do know there are a fair few apartment blocks going up in perth but unfortuanately i dare say a few are unionised so for the joe blow in the street often these jobs are out of reach unless they are in the know .
So really the construction jobs in the city and the mining jobs in the bush are all tied up for the lucky few due to either union monopolisation or employers who dont want to train up an australian work force .
I dont know wether the apartment blocks in perth will suffer like the apartment blocks in the uk where they have devalued by up to 60% ,i suppose only time will tell .
I dont know how long you have lived in aussie amazulu but i lived through the last recession here and it was far far worse than what was chucked at the unfortunate british workforce ,as i read somewhere australian recessions and slow downs are brutal and no part of the economy will escape .Lets hope in six months this hole that is developing will be filled in again .

Re: Aussie dollar on the turn
 

NO it wont "prop up" the Aussie economy...but it sure will help! Its not the number of jobs in the industry that has the effect but the value of goods sold, particularly for export, that brings "new" money into the country. It may only take a few thousand people to dig it out but the earnings for the sector are billions!

Re: Aussie dollar on the turn
 

The building industry should be viewed as a unique case, as it is really a "service" industry, and responds directly (& quickly!) to internal pressures.

In times of "boom" land availability becomes scarcer, and prices rocket, so the majors buy up land allocations that they may not develop for 1 or 2 years, in the certain knowledge that it is only going to cost more later!:rofl: Unfortunately this means that when a "recession" hits & house prices drop...even only a little, they are left holding development land that is un-economic to build on as they paid too much for it compared to what they can sell the housing for in the current market. This means they have to "downsize" and "tread water" untill such times it becomes economic to develop their land holdings again.

Perhaps a simplistic description of the situation, but basically what happens!

Re: Aussie dollar on the turn
 

I can see where you're coming from, but I think you're looking at the whole country as if it's a bigger WA. The fact is that a country doesn't live off a single industry - however healthy that is - and Australia generally is in trouble economically.

Dividing the "wealth" (whatever *that* is) of the continent by the population makes Australia one of the richest countries in the world. But there is widespread poverty, especially outside the major cities, and millions who are only just keeping their heads above water - and the water level is rising fast.

Yes, we can keep on digging up WA and flogging it to the Chinese, until the Indian Ocean is lapping against the divide. And this "wealth" will to some extent filter across into Joe Public's wallet. But there ain't much more in the bowl, in my opinion. The general apathy to making things better, to competing in any meaningful sense relegates Australia to a backwater economy in world terms, except at present for the mining industry.

Re: Aussie dollar on the turn
 

Despite being a property owner I just don't get the logic of crowing over increasing house values, or wailing when they fall.

Housing is like food, water and heating: it's a basic human necessity.

You'd be locked away for gloating about rising food prices. And food is, like energy, now feeling the huge inflationary pressure at last of the demands of an increasing population worldwide.

How would someone be looked upon, who stacked away tons of tinned food in the expectation of making a killing? Yet that's exactly the equivalent of praising housing inflation: it's just that we've been brainwashed into thinking higher prices are GOOOOD! (But only in housing).

Re: Aussie dollar on the turn
 

There are different ways to look at this. Sure, resources only affect a small amount of people directly, but they also influence the whole economy. Here's how:
Canberra and the states get royalties from resources.
More resources, more royalties.
These royalties can be used to cut taxes or be used for porkbarrel projects, ie infrastructure to stimulate/prop-up the economy.
Gov has huge surplus due to resources. This surplus enables my previous point.
Resource tonnage/barrels/cubic metres are increasing dramatically this year - after many years of flat growth - and will continue to increase in the next 5-10 years, providing even more royalties.
Etc.

That the government/states should be diversifying the economy is a given. Unfortunately, most governments are pretty short-sighted in this regard.

Define poverty? All countries - with the exception of a few European ones - have poverty. Always have had, always will. Welfare helps to cushion it somewhat. Only wealthy countries - like Australia - can provide decent welfare. In Australia, resources provide a lot of this wealth.

Australia may not be the most dynamic/resourceful/inventive countries in the world, but it is one of the wealthiest and is hardly a 'backwater economy'.

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Absolutely. Blame the govt which has encouraged escalating house values through its tax system.

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Ignoring your owm personal circumstances - does this not concern you? i.e. that its wealth comes from simply digging up the ground?

Re: Aussie dollar on the turn
 

Not at all. The things we have/need/want must be made out of something. The fuel we put in our cars or use to heat our homes has to come from somewhere. Australia is in the fortunate position of having a lot of the stuff in it's ground that society needs to function - and is prepared to pay for. Most of Australia's wealth comes from out of the ground/sea and without it we would be f**ked.

It would be criminal not to exploit our resources.