debbie76

friend in high places tells me australia is away to be in credit crisis does this mean exchange rate will do a u turn and get back to 2.50 dollars

daddyofthree

Hi Debbie, try checking out the earlier thread (page 2) 'Australian Dollar - exchange rate?!' and I think you might have your question answered!

WelshSarah

I dont think so too soon...

leave_n_on_a_Jet

check on Tuesday when RBA says / gives an indication as to if next month that they are going to lower interest rates because the Oz Economy is slowing to fast, if there is an indication to lower rates the OZ $ will get hammered back to where it came from (first step 2.12 2.18 2.26 2.33 2.39 2.43 if no indication of lower rates then expect 2.04)

Slow down in USA, Europe, Uk etc = less products made in China etc = less commodity's imported to china from Australia, = Job lay offs in China, less homes required etc. China / India Boom slows as it has everywhere else in the world, = falling house prices around the world, as people lose their jobs, Bank will not lend money to people unless they have large deposits because house prices are falling and they don't want to lose their money.

the reason china etc is booming is global demand for products, a mass of new jobs in china caused people to move from the poor villages etc in to citys etc. housing demands rose (as it has everywhere else in the world) new building for the new workers created huge demand for raw materials eg. Commodity's as global demand falls so will demand for commodity's Australia's main export.

The reason house sales are so important is that when people buy houses they buy new goods for it more than after they have lived in it for a while, eg new bathroom kitchen carpets etc, all new built houses require copper for wiring, tiles, bricks etc, once this boom slows or stops so does everything else, Australia is at the end of the chain.

The Credit Crunch has come full circle and will be here until house prices stop falling and people can afford to buy.

As Job losses are now starting to increase in Australia there should be a lot more sales as shops drop their prices just to get a sale or go bust.

Roll on the sales

James

debbie76

im thinking not alot of people understand the economy and how it affects exchange rates somebody out there must no how a down turn in australia's markets will change thing.

Centurion

Its not that straight forward. Comparative to what. A crumbling recession bound UK economy for example ?

Professional people make a living predicting the markets. And they aren't that great at predicting the future.

The Bloke

The RBA may be planning to lower official interest rates, but there is no guarantee that the banks will do likewise, as we have seen them raise the rates even if the RBA had not.

BATS666

...and even if Oz rates DO come down, who's to say that they won't ALSO come down in the UK? That way exchange rates may just stay the same....
Altho the US example (when they slashed interest rates a few months back) made bugger all difference to exchange rates.
New rules apply these days.
Confused? You will be.....

leave_n_on_a_Jet

when usa slashed their rates uk to usa didnt change to much from a high of about 2.12 gb / usd to about 1.93 now 1.97

where as uk aud 2.56 down to 2.03 now 2.11

and aud / usd aug2007 81 rose to about 98.5 now 93.35

James

Hotton

Yes the Japanese do thay borrow money from there country at next
to nill interest ,then invest it in Australian bonds(high interest accounts)
and pocket the difference ,blow a rasberry at the RBA and say thank
you very much its called the carry trade and it has a big influence
on the strength of the Aussie dollar

debbie76

just to make things clear in my head what is the best things that could happen in uk or aus to help us get back to being a force against aus economy.By that i mean better exchange lower house prices or is that a stupid question?

Centurion

The UK not being in/close to recession would be a plus and its growth strong and the Australian economy being in recession. But this isn't all the story when it comes to exchange rates but would be a massive slide the other way.

The thing is that really that scenario is not likely to happen in the near future and nobody is quite sure what is happening globally at present.