alipally

So does that mean the UK economy is getting stronger p, or is that Aus economy faltering?

Amazulu

Just look at the USD

That's all you need to know

chris955

It appears to be a bit of both.

alipally

Unfortunately, I don't have much in the way of USD, but I do still have GBP that needs to come over at some point......

Hoping for 2.5:1 but I may be waiting an awfully long time!

Grayling

Be careful of CGT on forex gains

chris955

Not necessarily, some said it would drop further and would never get close to $2 to £1 again.

Amazulu

QE is tapering off in the US and they are experiencing economic improvement, which is boosting the USD
UK economy also improving

but

the debt issue in both the UK and US has not gone away and both countries are doing little to address it. Eventually this is going to come back and bite them in the ass

TheCreature

"As of Q1 2013 UK government debt amounted to £1,377 billion, or 91% of total GDP. The annual cost of servicing the public debt amounts to around £43bn, or roughly 3% of GDP. This is roughly the same size as the British defence budget. It is forecast to rise to 96% of total GDP in 2013, further rising to 99% of GDP in 2014.
Due to the Government's significant budget deficit, the national debt is increasing by approximately £121 billion per annum, or around £2.3 billion each week"

Elephant in the room sort of stuff.

Amazulu

Indeed it is and even more so in the US, where Obama has no plan to deal with it. In fact, he's making worse

berserk

Well, a depreciation of the AUD would be good for Australia's economy. That's exactly what the RBA is doing - talking down the dollar. It's a deliberate effort.

http://www.bloomberg.com/news/2013-1...jawboning.html

berserk

Not really. If you're not aware, it's because the reserve bank actively is talking down the AUD. If you can see the graph below, the UK has a lot of catching up to do. The UK is still waaaay below it's pre-recession level.

UK GDP per capita


Australia GDP per capita

OzTennis

Yes, the overwhelmingly 2 most important factors explaining the easing of the AUD is the deliberate talking down of the currency by the RBA Governor and what is happening to the greenback and the prospects for quantitative easing there.

Looking on the bright side, the AUD is now 25% lower than it was against the GBP compared to less than 5 months ago. Anyone converting Australian prices to £stg - e.g. those thinking of migrating - now find everything is 25% cheaper. This only works of course if you are converting your savings/house sale proceeds into $'s. Many of those already there benefitted from the days of $2+ and even $2.50+.

How far it will go will depend on the market perception of whether Stevens thinks it should go any further than the levels it settles in at; what they do with interest rates and prospects for the economy, economies of major trading partners, what happens in the US of A.

chris955

Yes, really.

berserk

Where are your charts? You're just dreaming.

Hino

Thanks for the links berserk.

Fascinating reading. Great to see Australia's steady progression up the GDP ladder. With the Reserve Bank determined to talk down the 'Aussie' and further improve our trading position things can only get better