Politics and the AUD - still disney related, i promise :)

[aussiegirls]

So I was reading an article in the paper today. There was an article saying that if Tony Abbot wins the upcoming election that the business confidence will soar and it will bolster the stock market which, at the moment, is lagging behind Wall Street. It also said that investment in business will increase especially in utilities and building.

Now, I know that all sound boring, but my question is for anyone that knows about this stuff and might be economically minded. Would all this result in an increase to the AUD? My small brain is thinking that it might, am I wrong?

Whatever your political persuasion (and I am not asking because it is irrelevant) do you agree that it's almost a given that Abbott will be our PM next month? And if so, it's definitely going to have some affect on the AUD, what do you think it might be?

At the moment I am still tossing up buying my USD at the rate its at right now or taking a gamble and waiting. I don't know!!!!

 

[PrincessInOz]

Oohhhh.....that age-old debate. Do I buy USD now or do I wait???


My crystal ball is all foggy and hasn't worked in a long time.

 

[aussiegirls]

Hahaha, yeah I know. Ordinarily I would just buy it now and figure that its not going to change much in the next few months. But the fact that there could be a huge change in our country's landscape could actually be worth waiting for .

 

[WAMUMOF4]

I have $3000 to pay during our trip I could prepay but I guess I am one hoping that the $ will rise when we have a change of Govt
for what it's worth watching the buisness channel the other day they showed one of the banks forecast and they were expecting it to rise after the election.
I am a little about what will happen if it does go the other way I really don't want to think about it falling further

 

[FireflyFi]

Ahh, if only it were that simple.

I work in the finance industry, so do have regular access to currency predictions - and they are just predictions - but I don't know that I see any that are positive on the AUD. Basically, we've had it too good for too long, but then all of those predictions have been expecting the drop for ages now. The AUD is a battler, for sure.

I would expect the currency to go sideways for a little while yet, which is basically what the market does when it doesn't know what to do . Unless someone comes out looking like a clear winner. Is Abbott there already? I'm not so sure. People realllllly don't like him as a person, and his policies aren't exactly clear at this point.

In any case, the safest thing to do when you're not sure if the AUD is going up or down is to just hedge your bets. Convert some of dollars at a rate that's ok. If it goes up, well you didn't get it all at a great rate, but you also don't have the risk of having to convert it all at a lower rate. It's a personal choice, though. Another thing you can do is take a reality check - actually do the sums. If the dollar drops 3 cents, you're really only losing $30 for each $1,000 you're converting - is it really worth that much stress?

 

[Sugarglider]

our exchange rate, by definition, is also dependent upon what's happening with the other country.
So one of the reasons for our big recent drop was USA Fed Reserve announcement that they were thinking of phasing out "Quantitative Easing". And the US stock market is finally rising and is doing better than ours.
We've also had an interest rate cut since then, decreasing the attractiveness of the AUD relative to the USD - so to me it doesn't seem likely we are heading back up in the immediate future.
but really - no-one knows! not even the people whom you'd think are all over this. i like Firefly Fi's suggestion

 

[StephOz]

If the dollar drops 3 cents, you're really only losing $30 for each $1,000 you're converting - is it really worth that much stress?

I'd never thought of that way before, doesn't seem like it's worth being too stressed over thanks!

 

[FireflyFi]

I'd never thought of that way before, doesn't seem like it's worth being too stressed over thanks!

No worries! It is really easy to buy into all the media hype - I fall into the same trap myself from time to time - but really...if the dollar drops you might have a few less fancy dinners or bring back a couple fewer souvenirs (or a little more credit card debt!) but you will still have an amazing time

 

[WanderlustNZ]

I have been following changes in the NZ dollar very carefully, as for me every cent has made a difference.

Now that I am down to the last bits of spending money I'm not so worried. However changes in the dollar can have a huge impact on those who still have most of their trip to pay.

Many of us are handing over somewhere in the ball park of 10k to the US economy. Every cent the dollar drops on an unpaid holiday equates to an extra $100 of travel-related costs. As a percentage it's small, but when you think what you can buy for $100, I think it's significant. A big drop of about 15c (which has happened with the Aus $) could mean a difference of around $1500. That's enough for a pretty special hotel upgrade or shopping spree.

I'm not saying people should stress or loose any sleep over it, but I do think there is something to be said for keeping an eye on what is happening.

As for Aussie politics - sorry I'm clueless.

 

[WAMUMOF4]

I have been following changes in the NZ dollar very carefully, as for me every cent has made a difference.

Now that I am down to the last bits of spending money I'm not so worried. However changes in the dollar can have a huge impact on those who still have most of their trip to pay.

Many of us are handing over somewhere in the ball park of 10k to the US economy. Every cent the dollar drops on an unpaid holiday equates to an extra $100 of travel-related costs. As a percentage it's small, but when you think what you can buy for $100, I think it's significant. A big drop of about 15c (which has happened with the Aus $) could mean a difference of around $1500. That's enough for a pretty special hotel upgrade or shopping spree.

I'm not saying people should stress or loose any sleep over it, but I do think there is something to be said for keeping an eye on what is happening.

As for Aussie politics - sorry I'm clueless.

exactly for us it's a lot more than $30 DH wanted to change over $20k which still wouldnt of paid for all our trip when the Aussie hit $1.10 I procrastenated and it has cost us dearly add on the 3% the bank charges us to use our CC which was being absorbed because the $ was so high and all of sudden we are spending nearly $5k more for the same thing everytime the dollar drops my stomach feels

 

[WanderlustNZ]

exactly for us it's a lot more than $30 DH wanted to change over $20k which still wouldnt of paid for all our trip when the Aussie hit $1.10 I procrastenated and it has cost us dearly add on the 3% the bank charges us to use our CC which was being absorbed because the $ was so high and all of sudden we are spending nearly $5k more for the same thing everytime the dollar drops my stomach feels

It is a upsetting feeling.

I just sat down and went through my whole holiday folder deciding that it was time to work out exactly how much I am handing over to the US economy. I haven't actually blown my budget as much as I thought, but I still got a bit of a fright. The only thing that I have paid for in NZ dollars has been my Air NZ flights. Everything else, right down to small expenses such as the ESTA, have been paid online in US dollars. When I factor in the spending money I will still need, the total sits quite a bit higher than the 10k I originally quoted and each drop in the dollar has had even more of an impact than I what I first quoted.

Years ago the NZ dollar sat at about 50c against the US and that was considered the norm. I don't think I could travel to the US if the dollar ever dropped that low again. The extra expense would be horrific.