USD Rising Against AUD

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hoyts

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Just 2 months ago the Australian dollar had jumped up to a new record of 98 cents to the USD..

Now it's dropping dramatically to what it was a few years ago.
It's now at 80.96.

I hope it keeps dropping or stays like this because it means every payout Australians receive from an American network will convert to more.

I hope other countries are benefiting off this as well.

Can anybody tell me what determines the rise & fall of the dollar?
 


1) Lower oil prices

...

2) Weaker than expected European (namely Germany and the UK) & Japanese economies
3) Lowered expectations for the Euro zone, higher ones for the US by the OECD

Though 2) and 3) played somewhat of a role, the USD is pretty much tied to the oil price. A lower oil price also lowers the risk of overall inflation and thus increases the chances of the ECB lowering their interest rates, which are quite high compared to ones set by the Feds (2% vs 4.25%) and such a huge disparity obviously leads to people investing their money in Euro instead of dollars.

Euro:USD

chart.gfx


Oil prices



alexb: International trust of the dollar? Don't make me laugh.
 
gopher said:
alexb: International trust of the dollar? Don't make me laugh.
Click to expand...

Hi, I'm a rich foreign country holding 200 billion dollars. I decide that holding dollars is more risky than holding Euros, so therefore I sell my dollars for Euros and the value of the dollar decreases.
 
alexb said:
Hi, I'm a rich foreign country holding 200 billion dollars. I decide that holding dollars is more risky than holding Euros, so therefore I sell my dollars for Euros and the value of the dollar decreases.
Click to expand...

Your point being?
 
It's not nice losing more money as I use PayPal...but back in the day I used to make quite a lot of $$$ from the exchange rate...of course, everything in Australia is one billion times more expensive than in the US.
 
Our dollar dropped recently as a lot of hedge funds pulled out of currency for Euros and Canadian dollars.
Reason for this being that some banks decided they'd drop their interest rates, without an official drop in the reserve bank, so as to encourage people to keep on borrowing. Now, whilst this is good for people IN Australia as it gives them a bit more liquidity, people outside of Australia simply see that their investments are dropping a few percentage points in the interest rate they're getting, and pull up anchor, investing it somewhere else that still has better interest rates.

There are a few other major contributing factors that have to do with our mineral exports, particularly to China (they're not buying as much iron, copper or coal all of a sudden) and Russia (where a 5 year uranium supply deal is starting to look a bit shakey).

As it was, our dollar was hyper inflated. There is no way our currency should have reached parity with the US Dollar, as we simply don't have the resources or production capacity to actually back that kind of value.

That said, those interested in currency trading should REALLY buy into Chinese currency. It's been undervalued for far too long, and there's only a few more years that the Chinese government can keep it that undervalued without some major national disasters wiping out production capacity.
 
What does the income I make have anything to do with my knowledge about foreign currency's
Yeah, Australia is A LOT more expensive then America, meaning the dollar being so low for us now means there's actually a bit more for living.. If your getting paid in USD..

How long do you guys predict it will stay like this? Or it's completely random?
 
Hoyts: It's not random, you can see most market fluctuations and movements coming along. The corrections are harder to spot in the making though.
I would say our dollar is going to sit where it is for a while though. $0.80USD is where it should be in terms of market strength and backing, so sitting at about $0.83 means we're still doing well.
When we go higher than that, it's not that our dollar is improving, it's that the USD is tanking.

A better benchmark for dollar comparison is the British Pound. The currency is pretty damn solid.
 
Yeah, of all times for me to move to Australia from Canada was end of May... so June/July was when I was taking money from my Canadian account, at almost par with the AUD.

God damn it.
 
It sucks when im paying for traffic is U.S dollars (facebook) and then getting paid in AUD dollar from aussie networks. But it's not that bad.
 
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