In March $1 US was $1.33 AU and now it is at $1.45 AU. Why is our dollar falling?
Australian Dollar Falling, What Could Be The Reason?
RSmith on 12/05/2022 - 10:30
Last edited 12/05/2022 - 10:51 by 1 other user
Last edited 12/05/2022 - 10:51 by 1 other user
Comments
Um, let me guess: inflation, interest rates, wars, fuel shortages, food shortages, supply chain issues, instability and global agendas :P
Bottom line: the world has more to worry about than wanting worthless AUD ;)
People putting their money in USA where the interest rate is now 1%.
Aussie interest rate is only 0.35% so very low returns in keeping money in A$.
Bitcoin in freefall
Normally in australia we refer to $1 aus to US amount. ei $1 aus = 0.69 us… not the other way round.
Normally the currencies are referred to as USD and AUD.
The AUD is going up in value. People should be 🎉.
Australia's economy (contrary to how some governments will try to sell it) is actually on the verge of a recession. This combined with low interest rates makes it a very hard sell on international markets.
So is the USA's.
USA's interest rates are higher than Australia's though ;)
Sure - but Australia's GSP is down 0.3% annual.
The USA is down 3.5% annual - that is ten times worse.@Almost Banned: Wait that would mean that the RBA has missed the boat on raising interest rates?!?!
But yes, our interest rates are still way behind where they should be.@Drakesy: I don't envy being in the RBA's position, they've kept interest rates low because the economy wasn't doing well, but it really needed to be raised earlier to control some of that inflation. Damned if you do, damned if you don't.
@Ultimate Gattai: Yeah I do have sympathy in some respects. But in reality the RBA shoud've never let them get so low. 0% interest rates had been tried in Europe and Japan before as An experiment and didn't work. All it did was inflate house prices and kick the can down the road.
@Drakesy: Thank god we didn't go into negative interest rates, that's a deep hole that takes forever to climb out of. But I see the low interest rates as a failure of government policy to stimulate the economy, the RBA has so few tools to push the economy in the direction it needs to go, and this government has been very languid about it's responsibilities. I blame the government moreso, even the RBA's Phillip Lowe blames the LNP for their horrific mismanagement of the economy.
Australia doesn't do recessions. We just speed up the money printer to compensate.
The genius of a conservative government crawling its way to the next election
The LNP conservative? 🤣🤣🤣
When there is war usually money flows into gold which is denominated in USD. USD is also safe haven currency because commodities are traded in USD. If you don't want to be left holding not so stable currency to buy stuff in USD might as well change it all to USD. It is like during Greek financial crisis people sent all their Euros to banks that are not Greek banks simply because the government might force people to take a cut of their deposits like Cyprus did.
*Raw chicken curry
*Pants being pooped in at a certain maccas
* In 1998, The Undertaker threw Mankind off Hell In A Cell, and plummeted 16 ft through an announcer's table.
this is what happens when you print money to infinity during the pandemic
It was only doubled. People should be seeing their salaries doubled too. If not, I wonder where the money went…
Try the $8.4T debt 🤔 that AU govts are kicking the can down the road with "she'll be right" mentality, or letting the next guy in election worry about it. Aussies are way too casual, they don't even bat an eye when it comes to mirco/macro economics…
Watching this thing tick up just for 2mins alone is scaryyy.
Gov't can't even pay back the interest on that debt, let alone the principle.
Try do that with your HL or CC and see what happens.Basic maths / accounting 101 goes out the window.
Not enough cash inflow? Hit the button on the 💵 printer.
Serious question - where's my printer when I cbf paying for rent? Or maybe I wanna deck out my driveway and call it infrastructure so some chump can pay for it insteadYea but it was worth it, some grannies were dying from the flu so we had to cripple ourselves and offer our children as sacrifices in servitude of overseas banking empires. Sums it up i think.
Perhaps a new "Biden" in the making? ok lock me out I am running!!!
Market forces.
or
Election coming up?
china's economy is slowing down. australia is an exporter
Even though resources are generally doing well - which should be good for Australia - I think global uncertainty is pushing money into more traditional 'safe' currencies.
But what do I know. Ask George Soros.uncle Schwabs great reset is going according to plan
My guess: overseas investors homing their money. Why anyone wants to take money out at this stage is beyond me.
Aussie dollar should rise on the back of solid iron ore price and history breaking price of coal, meaning they are better off taking money home later when AUD:USD reaches 0.8-0.9:1.
AUD:USD reaches 0.8-0.9:1
Will it reach that level though?
It was 1.1:1 in early 2010s, and iron ore pricing was just on par with 2022 price. Additionally, coal miners are literally printing money atm. You're looking at PE ratio of 1 to 3 for these companies.
Your guess is as good as my guess, but a sensible, unemotional guess would probably be yes.
:)
In the 2010s, AU interest rate was rather higher than the US (which literally stayed close to zero until late 2015).
@UncommonName: Quite right interest rate was 6 - 7% then.
Perhaps 2010s issued Aussie bonds, term deposit is maturing, hence the capital outflow?
Solid iron ore price? The price has been falling for months and is likely to fall further due to dropping Chinese demand. It dropped by 7% on Tuesday alone. That along with the US boosting interest rates much faster than us and rising inflation shows the massive flaw in pumping the housing market the past decade to obscene highs, now we can't raise rates quickly without throwing a pile of people out of their homes.
It's why the Aussie dollar is falling, no one wants our dollarydoos to buy our ore and you can make more money in the US markets.
most currencies are cratering vs the USD
the strongest one right now is the ruble lol…
Biden fk up shutting Russia from SWIFT.
Putin turned the table and made the RUB stronger.
so freaking hard to figure out whos actually winning off news/analysts, i'm don't even bother anymore waste of time
RUB holders are so far happy lol
It's a fog of war. Both sides are actively reporting nonsense and fake stories designed to obfuscate what's really going on and balance morale in their favour.
(Don't tell the braindead Redditors how propaganda works though, they still think reality is a Marvel movie and that "their side" are the wholesome honest good guys that absolutely would never make stuff up ever.)
The value of the AUD in "business as usual times" has a positive correlation with commodity prices and with AUD interest rates in relative terms to other significant currencies.
Where there are global shocks, there is typically a net move out of AUD assets, driving its value down.
Yeah, 2010s were exceptional.
Markets are tanking. Global de-risking is imminent.
Load up on water, food, guns and ammo.
guns and ammo
Howard took these away from us.
I'm so sorry.
🪃?
My boomerangs never come back 😭
AUD = risk asset
USD = safe haven
Investment climate = risk offThanks for the responses guys. I have one more question… I have approx $5000 US in cash with me. Is it a good idea to convert it? I don't have any plans to go to USA in the near future.
The US$ always increases in value during market volatility. That’s the reason. It’s a safe haven currency so demand increases which increases its value relative to most other currencies. It’s not rocket science or some Qanon conspiracy.
The Liberal government.
Falling $AU is good for exports and we do a lot of it..iron ore, coal, gas, etc. Gotta pay for roads, hospitals and submarines somehow!
The goods is then exchanged for other commodities not $$$.
Yeah nah, commodity prices and demand are actually on a downward trend at the moment.
The RBA is deliberately keeping the AU$ low so as to maximise exports (themselves often in USD$) & it just makes things worse locally as the USD$ therefore is exporting inflation and therfore delaying the collapse of the USD$ into HYERINFLATION
Inflation 👆 devalues people's time.
AUD 👇 devalues people's time.
Inflation ☝️+ AUD 👇 = pain 🚂.
Pain 🚂 + interest rate hikes = 💉 🛀.
Hi frens,
Breaking News
https://twitter.com/zerohedge/status/1525104135523254278?t=B…
Gold Tumbles Below $1800, Erases All YTD Gains https://t.co/bgyHwzpZnCWhere is all that 💵 going to find a 🏠? 🤔
The market is behaving irrationally.
People damping gold sounds reasonable. It's not like it's been going anywhere in the past 10Y.
Gold has been performing pretty strongly in AUD terms - +60% in last 5 years and still positive YTD - in large part due to the depreciation of the AUD.
https://twitter.com/DylanLeClair_/status/1409878363355987969
Gold underperforming the CPI since 1980. https://t.co/mb5qFQTKe3@rektrading: Yes, gold grows strongly above inflation during some periods (such as the last 5 years, in AUD terms) and significantly underperforms in others (like 1980-2000 in USD terms). To some extent this is also true of shares, bonds, real estate, etc. although these asset classes also produce income which gold cannot do. Gold's value as an investment is that its price is less correlated with these other major asset classes like shares and bonds, so it can be used within a diversified portfolio to reduce volatility of returns. (In Australia I suspect holding some USD could play a similar role).
@rektrading: Gold was on the nose and central banks sold a lot of out off and that depressed the price for a long time. They, the central banks were wrong and they all paid the price, as we did in Australia, where that gold would balance out our debt. Without the gold, we just have the debt!
🤷♂️
Apart from interest rate differentials, the AUD is a proxy for global growth. Recession coming means it will fall some more
Some are selling, some are buying.