Australian Dollar 2018

Australian dollar to succumb to declining yield gap, warns Mark Farrington

 

Its a roller coaster at the moment

 

The AUD is near 8 year lows right now (under 64 cents EUR).

USD is on the way down, and is not the majority of trade and investment, but Australian media always seems to focus on it alone. AUD is also near 10 year lows against CHF, & post-brexit low against GBP.
Depends on your perspective, only these 4 currencies concern me, USD irrelevant.

 

Saw a graph with the interest rate forecast of the Feds and RBA and it showed the US will exceed ours at the end of 2018/early 2019. Now if this happens I expect our dollar to drop a lot but by the graph its short lived they exceed ours and were 2% by 2020

 

Which currency is then?

 

No single currency dominates, USA investment is around 28%, European countries together around 35%
Which countries invest in Australia?

 

so not exactly irrelevant then.

 

No, but I was referring to me. Was recently back in Australia and the business news reports the AUD is "strong" yet I'm transferring to Europe at the worst rates in a while, didn't make sense. Depends on your reference.

 

Just checking in on how everyone is going since the collapse of our financial system and the liquidity squeeze?

Anyone panic selling in this GFC scenario? Desperate panic sellers will get plenty of attention on here.

To be fair the AUD did come off a bit though.

 

Yes been a turbulent week so far but I doubt we will get into a GFC situation anytime yet.(China's economic indicators are still pretty stable a.t.m)

However rates are going to go up locally pretty soon i reckon as the US 10yr is up around 2.78% now and AU 10yr has risen above 2.8% to match it (which also means most of the carry trade will still hold and maybe a slow unwinding in the months ahead depending on how things go with the yields). AUD is also slowly going down which will mean additional funding costs for our banks.

Unless the new US FED indicates otherwise on their rate policy for 2018, it seems the USD will be on an uptrend again for 2018. We are seeing the immediate reversal of commodity/oil prices in direct reaction to the rising USD.

@MTR looks like happy days for your US foray this year ;D

 

Thanks

I have finally decided to leverage my properties, equity release loans in US.

I can source 5.5% in USA against my properties at 65% LVR, this is massive as it means I can make my money work for me and just keep loading up, nice to play with US dollars while increasing cash flow.
The currency play another added bonus when I bring it home

MTR

 

Australian dollar tipped to slide back to 70 US cents

There are three key headwinds facing the Aussie battler: falling iron-ore prices, a gradual but discernible deceleration in Chinese growth and widening interest-rate differentials in favour of the US dollar."

 

The Aussie wasn’t meant to be this way

Maybe NOT?

I have been in currency for 20 years I have rarely seen correct forecasts.

I hope it doesn't fall I like it at 80cents or so.

 

I want it to go to 85c or even 90c. I got stuff to buy there.

 

Are you looking to shift and expand your portfolio into the US?

 

Yes going to do baby steps regarding investments in the US.

But moreso I want to buy some hobby related items. I didn't buy anything for myself for about 6 months but have been working hard. I need a new toy

 

Just beware there is a shortage of housing stock everywhere so prices just continue to rise, this means your rental yields will shrink

 

Yield gap has now reversed. US 2.92% Vs AU 10yr 2.87. AUD on its way down Vs. Greenback again.

 

no +3% GDP growth IN ANY QUARTER during the 8 years under Obama...to many; none of the current growth is attributed to Trump - current stock market records as one example, yet anything and all bad events are his fault?

 

Economists agree: Trump, not Obama, gets credit for economy