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Exchange rate AUD Vs GBP £1 buys $1.83

Exchange rate AUD Vs GBP £1 buys $1.83

Old Mar 13th 2015, 10:09 pm
  #181  
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

Originally Posted by Stu Ward
The pound has took a right tumble leaving me wishing I'd cashed in at 1.98
A sharp one. What happened there?
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Old Mar 13th 2015, 10:09 pm
  #182  
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

Originally Posted by Stu Ward
The pound has took a right tumble leaving me wishing I'd cashed in at 1.98
The Australian unemployment rate fell a few days ago, but less than some people thought, thus the chance of interest rate cut in the near term is assessed as lower, so the Australian currency is a better bet for return on their money. So the Oz dollar does better.

All in the short term.

Which points up two things. First that the money markets are made up of sheep crossed with goldfish who think that 0.1% difference in unemployment actually feeds through the noise to change inflation noticeably. And second that if they had done a smarter job with the control of the interest rates, etc. since 2007 they could have prevented the decimation of Australian manufacturing by not allowing the exchange rate to get so out of control in the first place.
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Old Mar 13th 2015, 10:16 pm
  #183  
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

Originally Posted by GarryP
The Australian unemployment rate fell a few days ago, but less than some people thought, thus the chance of interest rate cut in the near term is assessed as lower, so the Australian currency is a better bet for return on their money. So the Oz dollar does better.

All in the short term.

Which points up two things. First that the money markets are made up of sheep crossed with goldfish who think that 0.1% difference in unemployment actually feeds through the noise to change inflation noticeably. And second that if they had done a smarter job with the control of the interest rates, etc. since 2007 they could have prevented the decimation of Australian manufacturing by not allowing the exchange rate to get so out of control in the first place.
That saving manufacturing through lower currency would be just putting off the inevitable anyway. Too hard to compete with cheap labour markets for the western world.
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Old Mar 13th 2015, 11:43 pm
  #184  
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

Originally Posted by Beoz
That saving manufacturing through lower currency would be just putting off the inevitable anyway. Too hard to compete with cheap labour markets for the western world.
Kind of depends on how you address the threat.

If you a dumb you just hold up your hands and say "well nothing we can do".

If you are smart you concentrate on automation and forcing business to improve it's capital productivity gains to match the labour productivity gains - and then you can be germany.

Wages only matter when wages are a significant percentage of your costs.
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Old Mar 14th 2015, 4:50 am
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

Originally Posted by GarryP
Kind of depends on how you address the threat.

If you a dumb you just hold up your hands and say "well nothing we can do".

If you are smart you concentrate on automation and forcing business to improve it's capital productivity gains to match the labour productivity gains - and then you can be germany.

Wages only matter when wages are a significant percentage of your costs.
Ah. Yes. Tech. The saviour. We have a long way to catch up and implement that and in the meantime, why cry about the good old days.
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Old Mar 14th 2015, 7:23 pm
  #186  
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

Right you lot. We'll need to transfer money from the UK to Australia at some point before the end of this year. When will the optimum time be and what exchange rate will we get if we do it then?
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Old Mar 14th 2015, 10:07 pm
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

Originally Posted by louie
Right you lot. We'll need to transfer money from the UK to Australia at some point before the end of this year. When will the optimum time be and what exchange rate will we get if we do it then?
Doing it now is worse than last week.
Better than 3 months ago
Miles better than 12 months ago.

Better than next month ..... That's the million dollar question
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Old Mar 14th 2015, 10:34 pm
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

Originally Posted by louie
Right you lot. We'll need to transfer money from the UK to Australia at some point before the end of this year. When will the optimum time be and what exchange rate will we get if we do it then?
Sometime between now and the end of the year
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Old May 6th 2015, 7:06 am
  #189  
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

What happen to the dollar? I thought it was supposed to plummet on the back of an interest rate cut?
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Old May 6th 2015, 7:30 am
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

Originally Posted by Beoz
What happen to the dollar? I thought it was supposed to plummet on the back of an interest rate cut?
Ah, you don't just factor in events in the 2 countries for which the exchange rate relates to sometimes:

"Weak US trade data has sent the Australian dollar even higher against the greenback, adding to the Reserve Bank’s woes after yesterday’s interest rate cut.

The currency would normally be expected to fall on a rate cut, which is what the RBA wants, but it instead climbed as traders bet the current easing cycle has come to an end."
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Old May 6th 2015, 7:53 am
  #191  
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

Originally Posted by OzTennis
The currency would normally be expected to fall on a rate cut, which is what the RBA wants, but it instead climbed as traders bet the current easing cycle has come to an end."
Buy in the rumour, sell on the news.

I wonder what the UK election result will do to it tomorrow?

If Labour get in, the city won't like it - because the debt won't get paid down as fast.

However, if the Tories get in, the city won't like it because the referendum on EU membership will loom.

So in theory they should have priced in disappointment, but it doesn't look like they have.
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Old May 6th 2015, 8:24 am
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

Originally Posted by OzTennis
Ah, you don't just factor in events in the 2 countries for which the exchange rate relates to sometimes:

"Weak US trade data has sent the Australian dollar even higher against the greenback, adding to the Reserve Bank’s woes after yesterday’s interest rate cut.

The currency would normally be expected to fall on a rate cut, which is what the RBA wants, but it instead climbed as traders bet the current easing cycle has come to an end."
Also gaining ground on sterling due to the uncertainty of a general election.
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Old May 6th 2015, 8:30 am
  #193  
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

Originally Posted by OzTennis
Ah, you don't just factor in events in the 2 countries for which the exchange rate relates to sometimes:

"Weak US trade data has sent the Australian dollar even higher against the greenback, adding to the Reserve Bank’s woes after yesterday’s interest rate cut.

The currency would normally be expected to fall on a rate cut, which is what the RBA wants, but it instead climbed as traders bet the current easing cycle has come to an end."
I factored 3 currencies. Should have gone further and looked at the Euro.
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Old May 6th 2015, 8:31 am
  #194  
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

Originally Posted by GarryP
Buy in the rumour, sell on the news.

I wonder what the UK election result will do to it tomorrow?

If Labour get in, the city won't like it - because the debt won't get paid down as fast.

However, if the Tories get in, the city won't like it because the referendum on EU membership will loom.

So in theory they should have priced in disappointment, but it doesn't look like they have.
There's been rumours for months. Perhaps that explains the inactivity.
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Old May 6th 2015, 10:29 am
  #195  
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Default Re: Exchange rate AUD Vs GBP £1 buys $1.83

Originally Posted by OzTennis
The currency would normally be expected to fall on a rate cut, which is what the RBA wants, but it instead climbed as traders bet the current easing cycle has come to an end."
True, and if a cut is already factored in then there should be no further fall. But here we have an unexplained rise, which I attribute mainly to a rise in commodity prices.

What is worrying is the level of debt in Australia as well as the state of the economy in general which does not look like it is set to improve in the near future. This will in turn hurt the AUD as it will be a sign that even with record-low interest rates, the RBA still has work to do whilst it is running out of tools (even a further cut will just raise anxiety if the results are not as expected).
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