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Aussie Economy???

Discussion in 'The Pub' started by Matchstick01, Sep 6, 2008.

  1. Hey guys,

    Unfortunately I have had little time over the past couple of months to see whats going on in the media, and haven't found much that makes sense online, so can anyone tell me whats going on at the moment with the aussie dollar? I do a lot of importing from Japan, and in the past month I've watched the aussie dollar start dropping compared to everything else, and keep dropping, and its starting to make me a little nervous :? Are we going into a reccession? Whats the look over the next couple of months, is it expected to raise again or just keep plumeting?


  2. Odd, isn't it, when just a few months ago people were talking about parity between the Aussie and US dollars.

    What's going on mainly is that the US dollar is rising, for reasons that seem fairly mysterious. At the same time Australia has gone out of a cycle of rising interest rates and moved into a cycle of falling rates (first cut this week). Interest rate cuts usually lead to a fall in the value of the relevant currency.

    Since it's improbable in the extreme that Aussie interest rates would head up again - the only question is how far and fast they'll fall - that factor would tend to suggest a falling Aussie dollar.

    The imponderable is what will happen to the US dollar, but if the relevant conversion for you is int yen I'm not sure what's been happening with the value of that.
  3. I don't think that this forum is the best place to come, for Economic or Business Advice
  4. Paul, jump onto SR - peaches (financial journo) was addressing this exactly not too long ago. :)
  5. Thanks Bravus

    My main concern is with the Yen, but $AU has fallen against all the currency's listed on teh RBA's exchange page in the last week, and by more then 5% to the $US and the jap yen.

    Didn't go to a eco forum cos i probably wont understand all the jargen they use, just a simple explanation is what i was after.


  6. According to the Labor government, it's not their fault, they aren't doing anything to teh economy that's bad. They are good and all is O.K.
    I seem to remember someone using such words before teh "recession we had to have".
    Mind you, it's also funny how Labor is quick to take the credit for teh economy they inherited when they came into office, and as soon as it starts looking bad, point the finger at teh economy they inherited.
    Dumb voters much?

    Regards, Andrew.
  7. Meh, we can actually thank the Yanks for pretty much all of this particular slowdown.

    Not even worth arguing the Aussie politics 'cos it's irrelevant.
  8. Disagree entirely. Our dollar should be very strong due to massive raw materials exports. Nothing has changed since the election in this country, except the political party at the helm.
    So, there is a local factor, it just doesn't suit the Labor lovers to admit it (or they are believing the Labor PR machine again).

    Regards, Andrew.

  9. Put it all on black!
  10. What's SR?
  11. fcuk that. lucky number 7! :LOL:
  12. typhoon: so the dramatic tightening of credit and worldwide economic slowdown caused by the US mess has not effect on the Australian economy at all? that's your economic argument?

    Please state one (or more, if you've got 'em) specific thing that the current federal government has done (aside from simply being of the wrong brand for your taste) that has slowed the economy. Just one will do. What is the economic rationale behind your argument?
  13. Thanks to Anthony Keane from News.com.au

    Some Facts about the Aussie Dollar.

    So what has caused such a sharp U-turn?

    Firstly, the Reserve Bank of Australia has been making serious noises about lowering the official interest rate, with its first cut expected today. Second, commodity prices such as oil and base metals have dropped heavily amid fears of global economic slowdown.

    "The Australian dollar is still seen as a commodity currency,'' Dr Oliver says.

    Third, the US dollar has bounced back against most other countries' currencies in recent weeks.

    These factors have combined to force the Aussie dollar to a seven-month low, although it should be put into perspective. A US85c exchange rate is still much stronger than the levels below US50c it hit in 2001, back when it earned itself nicknames such as "Pacific peso'' and "little Aussie bleeder''.

    For the economy as a whole it's good news, even though it's bad news for travellers,'' says AMP Capital Investors chief economist Shane Oliver.

    "At US98.5c it was bad for the competitiveness of Australian companies,'' Dr Oliver says. Now, exporters will find customers can better afford their goods.

    So as you can see from this, the Government had little to do with the dollar being the way it is (If anything at all)
  14. Typhoon you have no idea what you are talking about..
    The reserve kept pushing interest rates up to slow the hike in inflation (Primarily in the housing market) (This was while the libs were in power). The interest rates finally hit the point where the pinch had slowed things, and somewhere in there the election happened. The actual impact of which party was in power was negligible.
    If you recall the Libs were starting that interest rates would climb under labor in the previous election, and less than a week after winning that there was an interest rate rise. And rates continued to rise for the next 3 years. The libs were expecting to lose that election, and would have been able to say “I told you so†but they won, notice how they didn’t use the same tactic in this election (Which they also were expected to lose) why is that? Because it was obvious rates were going to fall.
    Political parties taking credit or laying blame for interest rates is complete crap, Yes they have a little bit of impact but world markets are what drive interest rates, not local policy (To a great degree) And as has already been stated, interest rates drive exchange rates.
  15. I don't understand squat about economics but I get paid in US dollars so do watch it and try to work out what is going on.

    7 years ago every US dollar I got paid was worth AUD$2. This has slowly declined to almost dollar to dollar in the last couple of months. If the cycle is turning, expect it to keep getting worst for a while to come (although it would be good for me).

    As far as "forcasting" what the dollar will do, all I can say is no-one knows. There are heaps of experts out there and some say up, some say down. The ones that are right at the time are the ones that get published. No-one knows for sure or they would be really rich!
  16. Aren't they expecting more interest rate drops over the next few months? Does this then mean that the aussie dollar is expected to fall even more in the next few months?
  17. Unless there are other major developments in world economies, that would be a safe assumption
  18. I have heard it is the banks that control our inflation.
    Not the treasury, or the government.
  19. It seems to me, as an uninitiated bystander, that the modern habit of tying interest rates to housing prices (and therefore, inflation) is extraordinarily dangerous.
    If by increasing rates to the point where a slowdown turns into a recession (in an attempt to curb expenditure on, say... oh, houses?), are we not automatically encouraging investors to turn their cash into the safe option of bricks and mortar. Thus putting pressure on housing prices... ?

    Obviously I'm not an economist, or I would understand where I have got this wrong. Would someone like to enlighten me?

    Also, I can't help but think that anyone who thought the Aussie dollar was going to stay above US$0.90 for long was kidding themselves.
  20. I understand that Ktulu, I was just trying to bring to attention of an earlier poster the fact that Labour being in power had very little to no influence on the Aussie $$ value. :)