The $

[aussietravellers]

Ok, the $ has been dropping at what is alarming to me!

It is down to .80 cents this morning. Wasn't it .90 last week? At the rate it's dropping it will be at .70 next week.

I really don't know what to do. I have some very clever friends who changed the money for their Sept/Oct trip when the $ was at .92, I wish I had copied them Now do I go and change some now at .80 cents in case it drops further and does not rise again before Sept? This is the question.

Is there anyone here amongst us who knows a lot about the movements of the $ and where it's expected to go.

Is it better to buy up now or are the predictions that it will go back up? WWYD?

 

[PrincessInOz]

Aussietravellers - I would buy some now and watch the rate and buy some more over the next couple of days/weeks. I personally think that the markets are reacting to what is happening in Europe and going back to treating the USD as the world reserve currency, which they have not done since the GFC.

I also got the distinctive feeling that the US is heading out of recession. Shopping at the malls/outlets has definitely picked up and I found the malls/outlets to be much busier this time round and much more people willing to spend money than in 2009 or 2008. If there are good retail/economic figures coming out of the US for the previous quarter (and I'm not sure when the next set of economic indicators are due - I seem to think that it's usually the 3rd week of the month), then it is likely that the nervous investors will go back to holding USD as the reserve currency.

That being the case, plus the fact that European countries have overstretched their borrowings, the Aussie dollar is more likely to fall some more against the USD. There is nothing wrong (yet) with the economic data coming out of Australia - it's just that in times of uncertainty, the investors will go back to the traditional safe havens of USD and gold and sell off other "riskier" currencies like the AUD. Our dollar is linked to resources and these have been dropping a little bit over the last month.

I also think that this situation is unlikely to clear up in the short term - there is a real threat of sovereign debt default in Europe and I don't think that Germany will run in to support Greece, Portugal, Spain etc. Germany has their own issues with sovereign debt. I think that the only way for Europe to stabilise is if they drop interest rates in a concerted move like they did when the GFC happened. It's anyone's guess as to how likely this is going to be and whether the US and the UK would also rush in to drop their interest rates.

I pointed out in a previous thread that the traditional support/resistance points for the AUD in this price range are around 81.5 cents and then the next resistance point is around 79 cents. If the dollar falls below 81.5 cents, it will head to 79 cents (and under). If it goes up above 83 cents, it will head towards 84.5 cents. An each way bet would be appropriate (and if it were me, I would more likely buy more at 80 cents).

Oh - and our reserve bank has signalled that it is likely to "pause" in June and not put interest rates up - so there is no incentive for investors to buy AUD (and push the price up).

Disclaimer

All views presented here are solely personal and speculative. The author holds no responsibility or liability in any event!!

 

[kazbar]

I heard a financial guy on TV this morning saying that it would probably hit 79c in the next day or so and then he thought it would rebound to about 82c in the next few trading days

 

[aussietravellers]

Disclaimer

All views presented here are solely personal and speculative. The author holds no responsibility or liability in any event!!

Don't worry PrincessInOz, I wouldn't come after you if I changed some $'s today and it went back up to .90 next week


But thanks for all of the great info, it was very interesting. I really don't understand about the $ and it's movements, I only think about it when I am going on a trip and it may affect my shopping and make my trip a lot more expensive

 

[aussietravellers]

I heard a financial guy on TV this morning saying that it would probably hit 79c in the next day or so and then he thought it would rebound to about 82c in the next few trading days

Thanks for that info.

I many wait until next week and see how it goes. It has gone up to .81 again this morning, it is really just changing a lot so I may wait and see what happens. We still have 16 weeks before we go.

 

[lovintheland]

Call me a panicker but I'm going to buy some NOW!!!!!!!!!!

 

[aussiegirls]

I agree with PrincessinOz, that the global financial fears is the reason for this.

It's not as though anything concrete has happened to cause the AUD to drop, it is due to fears and speculation about what is going to happen in Europe (primarily Germany, Greece and to some degree the UK). I think that as the next few days and weeks progress and we see what is actually happening there, as opposed to what some people fear may happen, the dollar should steady out. It may not get back up into the 90's in the short term but I think that unless something like a 2nd GFC happens (which in all reality could) then it shouldn't completely bottom out.

I am not going to buy any yet. I'm not much of a gambling gal but I think I might just risk this one

ETA if this ridiculous mining tax actually goes through I think a lot of us can kiss our spending money goodbye

xxx

 

[BecBennett]

yeah it's tricky... what I don't understand is - the US stock market drops, so does our $, the US market gets better, our $ drops,

Our $ was really great until just recently when the US had that stock market crash just recently when the bloke sold a billion of whatever instead of a million of whatever.

I just don't understand why we are affected so negatively when their market is doing bad?

 

[Aust]

I changed AUD$600 over a few weeks ago when it was 93c, so wish I had have changed more! Also when the dollar first started to drop a couple of weeks ago we cancelled our direct booking with HoJo which couldn't be paid until checkout and rebooked on expedia.com.au (paid straight away) at the same price that we would have paid direct at a 93c rate.

Don't think I will change any more money now as we're not going to January...hoping it goes up again by then!! (if not will just have to spend less).

 

[BecBennett]

Also when the dollar first started to drop a couple of weeks ago we cancelled our direct booking with HoJo which couldn't be paid until checkout and rebooked on expedia.com.au (paid straight away) at the same price that we would have paid direct at a 93c rate.

That was a good idea, I wouldn't have thought of that!

 

[heidispidi]

Thanks BecBennett, changing our booking was my idea LOL (Aust is my sister). It was weird though, b/c we got it at the same price - exactly - that we would have paid direct through Hojo, but there was a difference in the exchange rate at the time of somewhere b/w 3 and 5c.

I changed $2000 at 93.5c, I'm now wishing I'd changed another grand or 2. That was about 6 weeks ago, and I had people telling me that the dollar would be going 1 to 1 with the US before long, so I held off. So much for that

I'm with Aussiegirls - I believe that the mining tax is the main cause of this sudden and rapid decrease. When the financial troubles in Europe first came to light, our dollar was still performing strongly.

But, what can we do, except hope that the Opposition does their job? For me, they have 7 months to do it. It's those people who are travelling soon who I feel bad for.

 

[1rocky]

I have just bought some more us dollars at 79.9 cents to day. last week bought some at 85 cents. so am hoping the dollar will go up before Jan. My travel agent has also advised us to pay for our us holiday now as the companies we are using are putting up all their prices for those that do not pay within the next few days. and they said it will go up more especially if the dollar falls more.

 

[rossip]

I'm with Aussiegirls - I believe that the mining tax is the main cause of this sudden and rapid decrease. When the financial troubles in Europe first came to light, our dollar was still performing strongly.

Nope - nothing to do with the mining tax - its the troubles in Europe , particulalrly Greece , and also the US stock market - have you seen the falls on there the past few days - we are in for another rocky road sorry to ssay IMO

 

[ColinA]

I think you need to take it as it is, 11 years ago when we first bought DVC our dollar was 0.49 to the US.

We just figure we are going and make sure we earn enough to cover the costs.

 

[GrazingGoat1966]

Long term average (ie over the last 25 years) is 75c, so as far as I'm concerned anything above that rate is a bonus. There are certain things we can't control in life and this is one of them.
Buy some now and hedge your bets. I'm fly out on July 31 so I'm spewing, but in the end it's only money!!! Besides got a ripping Qantas fare last night online for $1550 from Perth to LAX inc taxes. If we'd taken the Qantas/United share that we were looking at earlier this week it would have cost the family $1000 more, so I reckon that what I've missed out on the dollar in the last week, I more than made up for on last night's booking!! And that's what you've got to do. Hunt around for bargains, be flexible with your travel dates ( 1 days difference in the return was going to be $200 pp more!!), change up your hotels if need be to obtain maximum value for the dollar.
And be thankful you are going on holiday. Could be a lot worse. Look out your front window up and down your street and think of the poor mongrels who will be stuck behind their desk when you're living it up in the states!!!

 

[shaz105]

I so agree with you Grazing Goat this is our first holiday we my family and we are going to make the most of it.

Seeing that i have been married for 10yrs never had a honeymoon plus with my husband illness we dont know if this will be his only time he can travel with us semi healthy so what do you do you stay f**k it lets go

 

[PrincessInOz]

We've been spoilt looking for the last 18 months with the exchange rate being above 90 cents. I too remember travelling to the US with a 50 cent exchange rate.

For my part, I always have some US currency stored somewhere, irrespective of whether I have a trip booked or not. I keep changing currency when I think the rate is good at the time that I have the spare cash. If the exchange goes up or goes down, I've usually hedged enough away that it doesn't matter.

For those travelling in the next couple of months, I'm sorry that the dollar has dropped for you. But as GrazingGoat has pointed out, the long term average is 74 cents; and it's currently sitting at 83.3 cents. If I were travelling, I'd be locking this rate for about $250 - $500 (if you have the spare cash) and seeing how it goes over the next couple of weeks.

GrazingGoat - that's a ripper fare you got from Perth. Congratulations!

 

[ehsmum]

It's those people who are travelling soon who I feel bad for.

That would be me We go in 19 days. I told my DH a couple of months ago that we should change our money but he wanted to hold off. Now we're stuck with a crappy exchange rate

Anyway, we went to ANZ yesterday and they offered us 77c. I argued with her that it was 81c and she gave me the blah blah blah about the bank rate always being less. We ended up only changing $1000 just to get the travel card started and decide to wait and see what happens in the next few days. Out of interest we went to CBA and their rate was 80.5! I was so pissed off at ANZ! Anyway, we ended up putting the rest of our money on a CBA travel card there and then. If it goes up, oh well but we couldn't really pass up 80.5 especially as ANZ was offering a lower rate.

 

[Saskiwi]

The last two times we have visited the US and DL (10 years apart!) we managed to time it when the NZ dollar (aka The Pacific Peso!) was at ....... 50c US ....and we STILL had a great time!

 

[aussietravellers]

When we went in 08 it was .95 and in December 09 it was .93, we have lucked out with a great rate for the last couple of years. I guess .83 is still ok in the grand scheme of things, when I consider that everything is paid for in the way or airfares and accommodation. Just have to pay for meals and shopping, still hoping will go up a little.

I think I will change some next week (Thanks to Queenie and PrincessInOz I am going to dabble in Traveller Cheques once again after a long exit from their use ) and just see how it goes, if it starts to drop again I'll get more and if it goes up, I'll just keep watching then jump in again.