spuddyo

Yep, it was 3 dollars to a pound when I came out here in 1993, everything seemed cheaper here back then.

DC10

Yes I can remember moving from Sydney to London in 2003 and going from a respectable entry-level job earning about $35,000 to a very similar role which paid almost $100,000 when converted

But the flip side was that a London cup of coffee cost about $6 and a month's rent for a pokey flat in a not-especially-nice part of town was $3,000, which would have been extortion in Sydney at the time (and still is)

I also knew a few Poms who'd sold up and moved to Aus and NZ in the early 1990s only to become utterly trapped here as a result of the currency moves soon after - I guess the risk is that that will be happening to a few all over again now

Tr1boy

When I first moved there, I found clothes mid range and above very expensive. The exchange rate was great but even after that things like decent jeans and shirts cost an awful lot more than they did in the UK. People get hung up on the ratio but often fail to actually calculate how much something is.
That gate swings both ways though.

Having lived and payed tax in 5 countries, I only have one economic barometer for this stuff. That is to calculate the amount of discretionary income you have each month. Everything else is a bit academic because you have to spend it anyway.

Things can get tricky when you might not stay in one place and forex rates need to be taken into account for future savings etc.

Amazulu

This is agenda nonsense

AUD is entirely within its range against GBP and USD

Sure it is trending to the lower side against USD (but still acceptable) but is average in relation to GBP. Against JPY it has hardly moved up or down (a much more important currency to Australia than GBP)

When it comes to advanced western economies, as long as their currency remains within range, then they can function quite well

Take USD/GBP. In the last few years it has been over 2 and down to 1.20-odd. Life went on normally whatever the rate. Nobody on BE was agenda whinging

Take SFR. This currency has rocketed due to the instability in the Eurozone and the GFC. Since the beginning of the year, after their central bank stopped protection it, the SFR has appreciated considerably. This is going to have a big effect on their large export sector and tourism, but their economy is not going to crash

Australia has become one of the wealthiest countries in the world despite currency fluctuations champ

DC10

Can you give some examples of currencies which have depreciated so quickly without being accompanied by a major financial crisis?

Amazulu

Where's the financial crisis today?

DC10

I just go back to the original point that a currency losing 25-30 percent of its value in a short space of time is not normally a good sign for the country involved. Nothing more, nothing less.

Amazulu

But no financial crisis

Nothing more, nothing less

Beoz

That's an interesting topic. The good thing is they could have found their freedom about 5 years ago. On the flipside you saw many a thread in recent years about British Expats wanting to move their money to Oz and struggling with the exchange rate. Hopefully they left it there any are moving it now. Moving forward who knows. Commodity prices won't be like this forever. Europe will be a thorn in the UK's side for some time to come.

I guess the best thing to do is have some money in both places. I just recently spent some time in Europe and the UK. I used pounds to finance it. Right now is not a great time to use the $A to do it.

Swerv-o

And these very low Australian interest rates won't last forever either...


S

sign

They said that in Japan; take a look at Denmark, and Sweden. Rates are only going one way, and that's not up. I never thought I would be in a situation where I am getting 1.25% Gross interest on my savings account in the UK, gobsmacked, but I cannot see it getting any better, hard and rock springs to mind. Australia is no different to anywhere else, it cannot insulate itself from the global economy, so Mr Stevens I think will keep dropping until either there is a currency crisis or the US lifts which for the life of me cannot see happening. The debts are just to big. I think Japan set the course and we are al following it. But that's my take, we all have different opinions and no one has a crystal ball.

Beoz

They said that in the US and ................. ?

sign

United States Fed Funds Rate | 1971-2015 | Data | Chart | Calendar

Jaw boning Patience in raising interest rates

Beoz

That's the point. Stagnate interests rates are not the only thing to affect currency.

DC10

Not this week, no.

But the deficit goes up every day towards European levels and that is whilst the economy is (in theory) still growing. The political and (absurd) voting system harks to another era and has no hope of coping with American-style partisanship and the difficult decisions which are now necessary.

The resources sector is a dead duck, and it remains to be seen how long the beloved real estate sector can keep running on the fumes of the boom. If that goes the banks will be well and truly stuffed.

It all feels very much like the UK circa late 2007 to me.