flying dutchman

Yes, that old chestnut again. Been torturing myself watching the dollar slip down the slippery slope that is forex rates and was wondering how low people thought it might go?

I have already bought the bond at a less than average rate and have some cash to convert when the rate looks good. Good to me is anywhere between 2.60 and 2.70. We are on about 2.56 at the moment.

Some analysts reckon she'll slide further with US rates possibly going up but what do they know? Britishexpats have always been THE authority on dollar movements so come on, when to buy?

OzTennis

If I could just predict what is going to happen with - UK interest rates, Australian I/R's, US I/R's, economic growth and jobless figures in all 3, Japanese recovery, oil prices, Chinese growth, war in Iraq, Israel and the Palestines, Afghanistan, Blair or Brown, Wall Street .............................................. - then I'd be able to help you out. I would also give up my job and earn a living speculating on the forex markets with my (sorry our) meagre fortune.

Not an easy one to call in short. FWIW, my gut feeling is the dollar still has some further sliding to do but watch out for the timing of I/R changes in all 3 countries as the thing most likely to have an immediate impact (1st week of the month in UK and Oz isn't it?)

OzTennis

flying dutchman

Cheers Oz! Yes, impossible to predict I know. At least for me! I too believe that it will continue to fall so I am holding off right now and watching the rates. Its quite fun if you forget for a second that every minor move is costing/making me money!:scared:

MSB

Like you, I'm glued to the rates at the mo. There are a couple off issues which could alter the rate over the next week or 2. The Aussies look at interest rates on June 2nd and the UK sit on June 10th if either of them make changes it could see a rise or further fall in the dollar. Most analysts seem to predict long term (look at forex charts etc) that there will be a further fall july august depending on US and could see the AUD$ fall further! Its tough but I'm waiting to see what happens with the interst rates first.
Mart

itsasecret

My feeling is that the markets are already priced for an interest rate rise in the US. The question is by how much will it rise, if they decide to up it faster than is expected, you may see some more movement.

China's growth is one to keep an eye on, any bad news coming from them can effect the $aud.
Oil could effect global growth, so everyone is worried about that too, but i think some good news will come soon, and the oil crises will slow down a bit.

Any terrorist activity on oil related instalations would upset things too.

Yesterday i just did a forward contract with HIFX for 2.54 (That to me sounds good.)

So far i have done 3 deals @ 2.44/ 2.52/ 2.54, Im spreading my risk and averaging 2.509 (which is good i think.!!!) still got about another £40k to exchange, I will probably exchange 1/2 of that soon and the other 1/2 if the rate gets really really good (2.70) or if it falls i will try and get it at my average 2.509..

Hope this helps and remember it wasnt long ago we were all worried it was going sub 2.30.!!!

itsasecret

My feeling is that the markets are already priced for an interest rate rise in the US. The question is by how much will it rise, if they decide to up it faster than is expected, you may see some more movement.

China's growth is one to keep an eye on, any bad news coming from them can effect the $aud.
Oil could effect global growth, so everyone is worried about that too, but i think some good news will come soon, and the oil crises will slow down a bit.

Any terrorist activity on oil related instalations would upset things too.

Yesterday i just did a forward contract with HIFX for 2.54 (That to me sounds good.)

So far i have done 3 deals @ 2.44/ 2.52/ 2.54, Im spreading my risk and averaging 2.509 (which is good i think.!!!) still got about another £40k to exchange, I will probably exchange 1/2 of that soon and the other 1/2 if the rate gets really really good (2.70) or if it falls i will try and get it at my average 2.509..

Hope this helps and remember it wasnt long ago we were all worried it was going sub 2.30.!!!

flying dutchman

Agree with you that given the doom and gloom of 2.30, the present rate is fantastic! 2.50 is my benchmark average which I am trying to beat. Historically that is a pretty good rate. But, I am in no hurry, I am going to sweat it until the interest rate announcements and then take a view.

elksa

I'm confused!!! I don't understand all this falling and rising dollar jargon? When the dollar falls does this mean you get a better or worse exchange rate? I keep reading you guys talking about the US dollar falling and rising and I don't know which is best in terms of getting the best exchange rate for our £££'s.

Thanks.

flying dutchman

OK, I am sure there are better experts on here than me, but if you hold sterling and the dollar falls against the pound, you get more dollars for your money.

Likewise, if the pound rises, then you get more dollars again.

If interest rates rise in the UK, it makes the pound more attractive to investors. Same in Australia if rates rise there - upward pressure on the dollar.

The US rate complicates things, but the US economy has not been a very attractive place to invest of late. The US dollar has been weak and investors ploughed money into other currencies (notably the Aussie dollar). This and high commodity prices made the Aussie dollar expensive for us Brits.

If the US federal reserve raises their rates then the US dollar becomes a more attractive prospect for investors and it will put pressure on the Aus $.

The Aussie economy is tiny compared with US/UK so is very volatile.

There are loads more factors and the fact that we all have our opinions about what the dollar will do next shows that its a mugs game!

elksa

Thanks Dutchman,

let me make sure I've got this broadly right.

The bigger the cap between the US dollar and the Pound the more dollars I get for my pounds.

Alternatively a rate rise in the US dollar will make more people invest their money in the dollar as opposed Aus dollar which subsquently means that the Aus dollar is worth less therefore getting we more Aus dollars for our pounds.

flying dutchman

Elksa,
You've got the last bit right, but not so sure about the first. The US relationship to the Australian Dollar is complicated especially with regards to its efect on the UK/Aus dollar exchange rate.

Key influencers are interest rates and if the UK rate goes up along with the US rate and the Australian rate remains stable, then (probably) the Aussie dollar will weaken.

Then again, a lot depneds on Asia. The Aussie dollar is strongly linked to commodity prices (gold, silver etc) and if Asian economies are not importing as much, this hits the dollar.

Best thing to do is work out an average rate over 12 months, set yourself a target and follow the ups and downs! And the very best bit of advice, once you buy, don't look at the rate again as you will kick yourself if it improves!

elksa

Thanks Dutchman

This is all getting a little complicated for me. I think I'll just monitor the exchange rates to get some idea as to whether the current rate is good or not, like you suggested.

Do you know any good web sites where I can track the exchange rate between £ and Aus$ over the last several weeks and months. All web sites I've found are either overly complicated or work more like currency converts which require me to enter the exchange rate.

Cheers

flying dutchman

Elksa,
www.hifx.co.uk give you a live feed of interbank rates. Another good site to spend time on is www.OzForex.com.au. You can ask the system to give you monthly and yearly averages. Puts things into perspective! And remember, even the experts get it wrong - if it was that predictable, there wouldn't be a specualtion market!
Good luck

itsasecret

ABCDiamond

a few years history on this one

http://www.oanda.com/convert/fxhistory