Australian Dollar 2019

Discussion in 'Property Market Economics' started by Karina, 2nd Jan, 2019.

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  1. paulF

    paulF Well-Known Member

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    Converting AUD to USD is starting to really hurt these day and it seems like it will only get worse !
     
    paulF, 30th Jul, 2019
    #101
  2. namrata

    namrata Well-Known Member

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    When the Fed drops rates again, I expect the AUD will drop along side it
     
    namrata, 30th Jul, 2019
    #102
  3. MTR

    MTR Well-Known Member

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    I wont be surprised if. AUD hits 65, its broken 70 barrier some time ago
    This was what some economists predicted
     
    MTR, 30th Jul, 2019
    #103
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  4. pvfv

    pvfv Well-Known Member

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    Share market would break records if dollar goes any lower. on the flip side bond yields would be worth next to nothing.
     
    pvfv, 30th Jul, 2019
    #104
  5. MTR

    MTR Well-Known Member

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    So why would share market break records? Can you explain
     
    MTR, 30th Jul, 2019
    #105
  6. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    capital flow in search of yield?
    current very high valuations of many companies across the globe is more a function of low IR than future growth.
     
    Last edited: 30th Jul, 2019
    TheSackedWiggle, 30th Jul, 2019
    #106
  7. MTR

    MTR Well-Known Member

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    Ok makes sense now
    Yield play
     
    MTR, 30th Jul, 2019
    #107
  8. paulF

    paulF Well-Known Member

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    The US Fed is expected to cut tomorrow so USD might weaken and hence the AUD might stabilise for now or maybe go up a tad. Who knows but the trend is down in the short/medium term , that's for sure.
     
    paulF, 30th Jul, 2019
    #108
  9. C-mac

    C-mac Well-Known Member

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    @paulF I hope you are right! I want USD to stay above 0.70 for a bit longer if possible! I've got deals to close damn it lol!

    Then of course once my deals are done I'm MORE than happy for it to drop to 0.50 and then watch the monthly rental yields kick up in AUD terms thereafter hehehe.

    Jokes. But not jokes. Hehehe;):D
     
    C-mac, 30th Jul, 2019
    #109
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  10. Waterboy

    Waterboy Well-Known Member

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    the FED cut will put pressure on the RBA to cut further, hence no real big effect!

    in fact it's 0.68 just now!
     
    Waterboy, 30th Jul, 2019
    #110
  11. paulF

    paulF Well-Known Member

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    I think the RBA should hold since everyone else is cutting which makes the RBA cuts pretty inefficient. I doubt that will happen though.
     
    paulF, 31st Jul, 2019
    #111
  12. C-mac

    C-mac Well-Known Member

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    This is probably a question for a different thread or topic buy I'm curious.. In countries where their RBA-equivalent (central bank) went into negative official interest rates of more than -1.00%; did the margins that retail banks make on mortgages actually get increased? E.g. let's say a banks standard margin (for simplicity's sake) is 2.00%. If an official rate is -1.00% that would mean their offered mortgage rate would be just +1.00%. That would be AWESOME for property holders where yields did not take a hit throughout that process. Cash flow would be AWESOME.

    But... what would happen if rates got to -2.00%? And the banks margin was 2.00%. That would mean in theory their offered mortgages were 'interest free,' loans right? I.e. 0.00% mortgage rates.
     
    C-mac, 31st Jul, 2019
    #112
  13. Waterboy

    Waterboy Well-Known Member

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    Sitting still will only make the AUD go up.
     
    Waterboy, 31st Jul, 2019
    #113
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  14. Waterboy

    Waterboy Well-Known Member

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    I've never seen a bank with negative funding costs, even in countries with negative official rates.

    Banks don't borrow money at the official cash rate. They also incur liquidity premium and other costs on top of the base rate.
     
    Waterboy, 31st Jul, 2019
    #114
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  15. Woodjda

    Woodjda Well-Known Member

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    Yep. From what I've read the Japanese banking sector is on the brink of collapse because their margins have been crushed so badly with negative rates.
     
    Woodjda, 31st Jul, 2019
    #115
  16. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    Low rates near zero are bad for bank margins as the premium just gets evaporated.
    Very difficult to attract depositor at extreme low rate let alone negative rates.
    Below is Au banks margin chart its already at all time low and will getting squished aka they wont be able to pass full rate cuts and also maintain their already all time low margin, something gotta give.

    upload_2019-8-1_10-53-15.png
     

    Attached Files:

    Last edited: 1st Aug, 2019
    TheSackedWiggle, 1st Aug, 2019
    #116
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  17. MTR

    MTR Well-Known Member

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    MTR, 5th Aug, 2019
    #117
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  18. C-mac

    C-mac Well-Known Member

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    C-mac, 5th Aug, 2019
    #118
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  19. The Gambler

    The Gambler Well-Known Member

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    I'm loving the drop in the Aussie against the Yen at the moment. Hasn't been this low in quite a long time.
     
    The Gambler, 5th Aug, 2019
    #119
  20. MTR

    MTR Well-Known Member

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    Its also an indicator that Oz economy is softening.
     
    MTR, 5th Aug, 2019
    #120
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