Australian Dollar 2019

{Note from mods - this thread continued from here: Australian Dollar 2018}




Aussie dollar drops to a three-year low
The Aussie dollar has crashed more than 0.6 per cent on the day and is hovering at just over 70 American cents, its lowest level since February 2016.

That means 1 US dollar = 1.43 Australian dollars today.

 

More downside coming as capital flows out of the country and housing downturn shocks the economy, i am still calling 65c to usd so long as trade wars are not resolved, things getting bad in china.

 

A currency devaluation like this is what they call a "silent crash". From a property perspective, it will reduce the amount of nominal property price declines, but in real terms, it's not good.

 

Not gonna be silent crash this time round i reckon, too many factors cooking up a perfect storm...

 

65???

 

So AUD falling/crashing what does mean for Australia? Anyone like to sum this up?

 

Unfortunate storm in a computer cup....Australian dlr left bloody after computer-driven crash
Back to US70c.

 

Something strange happened overnight with the Japanese Yen surging and the Yen palming off specifically Australian Dollar and Turkish Lira currencies. Just those two currencies, no others.

It wouldnt surprise me if the AUD drops to that 0.65 USD mark over the course of 2019.

On a personal note, I hope that if this does have to happen (I agree it would not be good for AU economy if it does happen), then I hope happens in the latter part of the year and not the first half, as I'm not done yet in purchasing in the US and want to try to squeeze one in before the currency dips too much!

 

Hard to believe....but the so called experts are saying that the $A fell because of the Yen carry trade flash crash......

Basically people borrow in Yen (low interest rates) and after paying for hedging etc they invest in high return (USA equities)......unfortunately it turns out people were investing in risky assets like Apple so when Apple fell 8% yesterday afternoon......there was a risk off for about 2 hours as people tried to exit enmass.

Its pretty much back to normal now.....but its a tangled web we weave......

 

IMO, the overall economy at the macro level should benefit as Australia is largely dependent on exports & tourism, however at the consumer level we will suffer as most manufactured goods are imported.

It's a weird situation because at the personal level it feels tough unless one has international investments &/or income but at a national level it can boost trade exports as long as our major trade partners are able to absorb the production.

 

that is why it balances out. the more $$ you are earning because of low currency will be paid in extra expenses

 

US treasury market got interesting,
6 month T-Bills yield is higher then 2/3/5 yr notes.

Swap market is even more interesting,
3 month Libor is close to 30 yr swap rate.

Interesting times ahead.

 

A lot of volatility lately. It feels a bit like in those cartoons where something is gonna blow and pieces of metal start flying off as the pressure builds...

 

Japan is, no pun intended, an old nation with a fast-ageing population. This means the majority of the country's mass wealth is in the hands of old Japanese people who once lived through the economic miracle back in the early 1970s. They usually tend to invest overseas as returns are higher. The reason being the country had experienced decades of stagnation i.e. deflation and liquidity trap (AKA lots of cash with negative real growth - an easier way to understand is you get punished for putting money in the bank).

On the other hand, varied factors including the USA has been imposing tightening policies, ongoing trade war with China, Apple's sales on decline in China's market etc. lead to rising gold price and falling bond yields. So CASH IS KING since the previous GFC is still a good reminder. During the time of high volatility, the reverse proves to be true i.e. they sell assets overseas and convert the proceeds into Japanese Yens.

By contrast, Aussie Dollar is a barometer that tracks global sentiments particularly mainland China's economic performance - its current largest trading partner. As everyone was rushing to buy the safe haven currency - the Yen, the Aussie dollar experienced a flash crash. Weak Aussie dollar at this very stage would not support the dampening mining industry nor will it be easier for foreigners to purchase any property in the country.

Only short-term effects but the yen tends to weather the storm.

 

So some pain ahead? But like the pheonix we will survive

 

The Dow was up over 3% overnight , and the Aussie dollar is a few % over 71 cents and I still think it will go above 80 cents this year ..From what I read there is so much money just sitting on the sidelines waiting for the bear market to turn that may be a while..imho..

 

Wow you are a bull, I see the AUD hitting 65

US stock market and this directly impacts on Oz markets, it slides so does the AUD

AUD already hit below 70, it will happen again

Fingers crossed

 

It does not worry me ,every time the dollar goes below 70 cents the ASX volumes kick in ,so in some ways a low dollar works well..Mr Trump with his caesar pontem facit mindset also helps..

Mutual Fund Ratings

 

Nope, AUD will hold 70. That drop was a failure of computers. An anomaly. Check the chart.

US stock market has come off a heap already over quite a period, you reckon its going down more??

 

Maybe wishful thinking.
70-75c range is where I'm putting the AUD for the year.