Tez

Hello peeps.
Tell me anyone!Why is it that when Aus raises its base rate by a 0.25 percentage point the aussie dollar instantly rises,and the pound loses six cents in almost a day.When the BOE raised its rates nothing has happened to the Aus rubber dollar/GBP exchange rate.

Aussie GDP is about 400 Billion a year.Uk GDP is 1,700 Billion a year.
The us/asia/europe recovery means more exports and subsequent growth not just for Aus but also for the UK.Exports from the UK to USA far outstrips the rock,dirt,minerals that Aus exports to the USA.

From what i have been observing re the Exchange rate between the two currencies is that there is no good reason why the Pound keeps losing value against the Rubber dollar.

So im pissed off for all those people including myself who have/are losing thousands upon thousands for no logical reason.This leads me onto my conspiracy theory.O Johhny Howard has asked,ney pleaded with Blair in there recent meetings for the Pound to keep devaluing against the dollar in exchane for Aus help in Iraq.Blair the smarmey twat that he is,and his cabinet having no real guts to fight the Uks corner anymore have agreed.
Because Blair/Brown want the UK in the euro and want to keep the Pound devalued so its more in line for the entry into the Euro.As though no one would notice.Having met many of the UK government knobs over the years,it wouldnt surprise me one iota if this was the true reason why the pound keeps losing value.
What huge damage The Blair project has done to the old country.Send the bloody lot of them to the front in Bagdad,the gutless Bastards..........There. I feel better for that my fellow ex-pats.....

dibrucewillis

Yeah I am sure that I read somewhere (maybe on ex-pats) that if the BOE raised the interest rates that this would in turn make the GBP stronger so as you say why is this not the case.

As you have probably gathered I am not really au fait with the money market and how it works but I do try to keep up with the exchange rates and have been trying to follow carefully over the past 4-5 months other forum users comments on this topic.

A question for the money people.
I have a lump sum which i haven't changed yet as this is offset against my mortgage,would i be better off changing it now at current exchange rate or holding on to it until the new year.

Diane
Any advice would be truly appreciated

tennisoz

Diane

Obviously ER's are volatile things but you've probably noticed most predictions are for the £ to continue to slide against the $ into next year. My feeling and its only IMO is that you will get more $'s for your £'s sooner rather than later.

The issue of why the £ didn't hold against the $ with the same IR rises is very complex and certainly beyond me. I can only say that the AUS$ is more tied to the US$ and events there rather than the 'mother country'. It is also affected by Balance of Payments situations and so on. There are also very buoyant economic forecasts coming out of Australia which increases the demand for and hence the price (ER) of the dollar. That's my 2 cents worth - I'm not sure why the £ didn't rise.

TennisOz

dibrucewillis

Thankyou very much for your advice tennisoz

Diane

nixstuff

It's designed purely to test my patience...and marriage.

Biggest conspiracy is that London AHC (where many of us had to 'sit on a shelf' for those of you not old enough to remember) kept us waiting for 2 bloody years...just to test our resiliance and find out if we REALLY wanted those visas.

We should have gone in 2002...now it's feb 2004, and we're $40,000 worse off for it because of the FX.

2.35 this morning. Just depressing.

Ran out of Wolf Blass last night...

joh117

Me and my hubby have been wondering the same thing why did the rate not rise when our IR rose. We are waiting to see what happens on Monday then going for it regardless. I will kick myself if it continues to drop and we say if only.....

Jo

louH

I work in the industry and to be honest I don't really have a Scooby!

That change in Oz rates early this week really surprised me.

In my personal opinion (and this is just me, not the minds of loads of analyst type bods who know loads more than me) I think the falls this week have reflected not just the rate changes we have seen but also the rate changes the markets are expecting to see. I think the £ has further to drop and I get the feeling its going to be a fast drop.

This is the bad news - on the upside what goes down must come up, historically the $A was undervalued against other currencies (in the days of 2.8), now the US$ is not looking so great. I think if you can hold off for year(s) rather than months there may be a case for doing so - otherwise try to fix a forward rate now to avoid the possible 2.2 the market is expecting to see in Q3 next year (actually, in light of what has happened this week that could happen earlier)

Sorry its not good news, best glimmer of hope is to stick your cash from house sale etc into hight interest account - at least you get a little bit more interest.

dibrucewillis

Another thought that I have had is as you say to put all money into a high interest account and then with the interest made on that rent something for about 6-12 months.
Just another option to consider I suppose.

Diane

Enzo&Chloe

louh has got it right

Markets move , by things that aren't expected. the BOE move was totally expected. If the rate rise had beeen 0.5% it would have moved the market.

The RBA rate increase was not *so* expected and so moved the market.

Therefore to judge future movements the question is where (Realtive to market expectations) do you think the interest rates are going

the general consensus is UK rates will hit about 4.75% by y/e 2004. ie another 1%

Here is some commentary to judge where Australian interest rates will end up.

http://investor.ninemsn.com.au/inves.../story_690.asp

IMHO it RBA will suprise the markets and raise another 0.25% in the Decemeber meeting, and the MPC will not move then. This will reduce the excange rate down to about 2.2 by y/e. Next year I see it continuing down with a bottom line of 1.5

These are only my personal views. Please do not act on them, act on your own view.

tennisoz

$1.50:scared: :scared: What was John McEnroe's line?

TennisOz

rajj

Historically, the Ozzie $ has always shadowed the American $ and has very little to do with blighty. Also with the rising Euro the ozzie markets will be monitoring the Euro more than sterling. Also, the Japanese economy will, IMO, have a big bearing on the Aus $. They (Jap) seem to be emerging out of the the big recession and will be buying / investing in OZ economy!!.

Also, your conspiracy theory re blair/euro etc is CRAP. There, i've got that off my chest.
PS having never voted for Labour, even I have to admit that they have done a fantastic job with the economy. You sure youre not just a europhobe!! (whoops- apologies in what sounds like an insult but is not!)

Wol

Because Blair/Brown want the UK in the euro and want to keep the Pound devalued so its more in line for the entry into the Euro.As though no one would notice.Having met many of the UK government knobs over the years,it wouldnt surprise me one iota if this was the true reason why the pound keeps losing value.
What huge damage The Blair project has done to the old country.Send the bloody lot of them to the front in Bagdad,the gutless Bastards..........There. I feel better for that my fellow ex-pats..... [/QUOTE]

So how do you REALLY feel about politicians? <g>

Brisney Sydbane

Thought some might be interested in the attached. I've no idea where AUD/GBP is going and dont suggest anyone use the history to make a judgement either - just for info

dotty

One thing that does surprise in all of these posts is the assumption that the Aussie dollar would stay so weak. Plenty of people have posted charts on here that show it was at historical highs (for the pound/dollar exchange.)

Nobody knows the answers to all these things, but one thing common sense would have told me was that when the exchange rate was at $2.95 that was one hell of a good buy. Did people really think it was going to go up to the $3.20 or something????? Did the strong OZ economy not provide some clues that OZ was improving?

Biggest thing I have found in Business and making dosh is that the biggest single factor is common sense. You dont need to be a financial wizard to see how high the dollar was, that from such giddy heights the most likely way was down.

Never in financial matters let greed or unrealistic hopes get in the way of good old common sense. Be honest, be critical, it will take you a long long way.

Nobody is ever going to always get it right, but you can improve your chances by being realistic.

renth

The same applies to the inflated property market over here fuelled by low interest rates and Negative Gearing.

My prediction - property price crash.