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Originally posted by Matt & Jo
Hi all,

Ok, this is our dilemma, we have money sat in the Bank, currently in sterling. The Aussie dollar seems to be going up and down like a yo-yo (more down than up).

Does anyone have any financial knowledge which may indicate what the £/$ may do in the next few weeks. Any advice greatly appreciated as we have lost my Toyota 4x4 in last month!!

Thanks

Love Jo, Matt and Jemma x x x xx

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Originally posted by captaincook
you say nobody knows about currency movements. but there are some known facts about the ozzie and exchange rates which provide some clues.

interest rate differentials are important. with last nights interest rate cut in uk the ozzie would be expected to rise as funds seek higher returns. It has already started looking at this mornings rates.

oz is a commodity based currency and therefore is linked to the success of the us and commodity prices are rising. likewise gold is through the roof for obvious reasons and the ozzie tends to closely follow the gold price. ozzie its lagging at the moment presumably because of the likely war but once that is out of the way and if gold is still moving up then its likely the ozzie could follow.

australia is doing ok economy wise despite the drought things are slowing a bit but still growing which supports the currency. It is a minor economy given its size though.

oz is a safe haven in times of trouble although not so sure that is the case now given their current involvement. ozzie has funded pensions which uk has to still tackle.

got to say things look more positive at the moment for the ozzie dollar given current interest rates than uk. just look at the kiwi and the ozzie over the past year against the us dollar. thats mainly down to interest rates.

uk has low unemployment, growing major economy, very stable currency and was until recently relatively high yielding - in fact a perfect currency and accordingly somewhat overvalued. But things do not look so good in UK. The economy is slowing, the government is supporting it with massive public spending linked to what now seem optimistic growth forecasts. Real jobs are being lost and being replaced with public sector non-productive jobs. London is the driver of all things UK and it is suffering. Tax rises are on the way and congestion charges start in London. Just look at the UK stock market - it actually fell when interest rates were lowered and it has been falling to the lowest level in ages probably reflecting all the above.

whilst you an never predict short term movements or the future you can look at the wider picture and get a pretty good idea. i conclude that the ozzie is going to rise against the pound until the war comes and then who knows. having said all that ozzie economy will suffer with a more valuable currency and would expect in a couple of years for it to be well back over 3 to the pound if not lower.

just my personal view and probably hopelessly wrong !

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Originally posted by captaincook
you say nobody knows about currency movements. but there are some known facts about the ozzie and exchange rates which provide some clues.

interest rate differentials are important. with last nights interest rate cut in uk the ozzie would be expected to rise as funds seek higher returns. It has already started looking at this mornings rates.

oz is a commodity based currency and therefore is linked to the success of the us and commodity prices are rising. likewise gold is through the roof for obvious reasons and the ozzie tends to closely follow the gold price. ozzie its lagging at the moment presumably because of the likely war but once that is out of the way and if gold is still moving up then its likely the ozzie could follow.

australia is doing ok economy wise despite the drought things are slowing a bit but still growing which supports the currency. It is a minor economy given its size though.

oz is a safe haven in times of trouble although not so sure that is the case now given their current involvement. ozzie has funded pensions which uk has to still tackle.

got to say things look more positive at the moment for the ozzie dollar given current interest rates than uk. just look at the kiwi and the ozzie over the past year against the us dollar. thats mainly down to interest rates.

uk has low unemployment, growing major economy, very stable currency and was until recently relatively high yielding - in fact a perfect currency and accordingly somewhat overvalued. But things do not look so good in UK. The economy is slowing, the government is supporting it with massive public spending linked to what now seem optimistic growth forecasts. Real jobs are being lost and being replaced with public sector non-productive jobs. London is the driver of all things UK and it is suffering. Tax rises are on the way and congestion charges start in London. Just look at the UK stock market - it actually fell when interest rates were lowered and it has been falling to the lowest level in ages probably reflecting all the above.

whilst you an never predict short term movements or the future you can look at the wider picture and get a pretty good idea. i conclude that the ozzie is going to rise against the pound until the war comes and then who knows. having said all that ozzie economy will suffer with a more valuable currency and would expect in a couple of years for it to be well back over 3 to the pound if not lower.

just my personal view and probably hopelessly wrong !

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