Shaun&Dee

The UK stock market is crashing (or a blip), it appears that the exchange rate is going up £/AUD. What is your opinion on what this will do to the exchange rate? Up or down... But now or wait...

marcpiano

Depends how the US market reacts to the global fall today. If it loses 5 or 6% as well then the Aussie Dollar will fall further.

Also the market isn't crashing, it's correcting itself following the massive highs late last year. Although now's the time for put options!

sammyg

i really don't know but last year when there was a blip in the stock market the exchange rate went to 2.5!

allankate

Sounds good to me

Allan

ozzieclare2b

Just looking on ozforex the £/usd is falling and £/aud is rising pretty fast so looks like a good time to change currency coming up. Hubby follows the market and reckons when usd falls against £ the oz market usually does the opposite so hang on to hats it could hit 2.5!! its currently at 2.25 so good luck

Disclaimer!! Dont change your money on my advise though lol as i am not an expert

woodring

UK interest rates could possibly come down at the next Bank of England rate committee meeting,to try and bolster the economy .This is in early Feb. Watch rates closely prior to the meeting ,if stirling strengthens before this meeting it may be a good time to buy the A$ as there will probably be a correction downwards after a rate decrease.

mindblower

[ QUOTE]

I locked in all my savings waiting for OZ 2-45 a few weeks ago prior to the house sale.

Hopefully onwards and upwards to cash in.

Dave

Wendy&Mike

Here is a chart of the price for the last year,



As you can see it is pretty much a downward slope with odd bumps when different worries upset people.

Personally, with the Feds just cutting 3/4% of the base rate, UK has to follow suit. Aus is probably going to hold rates. My guess would be that the down trend will continue and in about 9 months we'll hit $2/UKP. Sorry.

BTW, I know absolutely nothing about the forex market.

Mike.

capetosydney

Usually when there is a bit of a panic in the market and sell off like in the past few days, safe currencies are favoured over more risky currencies. So pound, yen and dollar will appreciate a little over Aus dollar, maybe few % but as soon as CBE cuts rates, Aus dollar will get back lost ground and even appreciate again because of interest rate differential.

datamile

Panic move from the fed

"The US Federal Reserve has cut interest rates to 3.5%, a shock three-quarters of a percentage point reduction."

It might stop the fall.. UK recovered

http://newsvote.bbc.co.uk/1/shared/f...et/default.stm

aus2be

Just for this in from OzForex

--------------
:: Great Britain Pound: Sterling made some solid ground overnight, helped by the emergency rate cut from the US Federal Reserve and convincing indications from Bank of England Governor Mervyn King that borrowing rates in the UK would also be slashed. The combined impetuous of King’s comments and the Fed rate cut helped GBP/USD bounce from its overnight low of 1.9340 to peak this morning at 1.9608, and with tonight’s release of BoE minutes we could see the pair make further gains. The recovery has also helped the pound on the crosses, with GBP/AUD opening this morning at 2.2575 and GBP/NZD recovering to open at 2.5630.

- We expect a range today in the GBP/AUD rate of 2.2520 to 2.2620
-----------------

Darren

NikiL

If UK interest rates keep falling, and Aus interest rates keep rising, it makes the Australian $ more appealing to investors. That means there is more of a market to buy Aus dollars, therefore the exchange rate will be worse.

It is also affected by inflation, and if the Australian rate of inflation minus the UK rate of inflation is less than the difference between the interest rates, then the exchange rate is more likely to move favourably for people wishing to buy Aus $. If the inflation difference is less, it is more likely to move unfavourably for people wishing to buy Aus $.

Then there's the global recession potential, various other indicators etc that could throw that argument completely out of the water.

The ft quotes the spot forward at close of play today at $2.2612 for one month, $2.2675 for 3 months ahead and $2.3080 for one year. By tomorrow that could have completely changed.

In volatile markets (which lets face it is what we are currently in), set a market rate that you're prepared to exchange at so you can take it when it appears. You can beat yourself up about you could have got one cent better rate for 3 minutes at 3.16am, but is it really worth the stress?

Amazulu

I'm not convinced RBA will raise interest rates here next month. Sure, inflation is rising here but the rest of the world is in a pile of pooh at the moment and I think the RBA may hold off for a month or two to see how the global economy moves.

jellibaby

We changed 100k yesterday (as we have a house to pay for here) and the rate was at it's highest to buy at 2.25. We still have more to come over but expect to change by end of Jan as the next round of interest changes in the UK and the US are not likely to make huge advances against the Aussie dollar (might be wrong though). Either way the exchange rate is unlikely to reach 2.5 over the next 12 months. We were every lucky and managed to get 200k across at 2.44 last year after the sub-prime problem rolled across the globe. That was then though, and although it would be fantastic to get the same rate - we won't - so we'll do the best we can on the day. It has however, gone as low as 2.16 over the last couple of weeks for things could still get a whole lot worse!

smurtaza

Its a time of economic survival.Euro and GBP are the best currencies in the world as they are now more stable and practically better than USD$