Aussie Dollar Slides More, Below US $ Value!!

[Karennella]

I would definitely wait! Although, as I said before, we are affected by overseas economics (eg US stimulus this week), we are also in a bit of a holding pattern here because of the federal election in September. It is widely accepted that the current government will be replaced but it causes uncertainty. Australians are paying down their loans at a rate never before seen rather than indulging in consumer spending.

[mr walker]

Australians are paying down their loans at a rate never before seen rather than indulging in consumer spending.

 

Yes, there's an irony in Aussies paying down their debts rather than spending, and the government is spending like there's no tomorrow and running up the national debt.

Anyway, back to cruising. Our upcoming cruise is in $A and final payment is next month, so no Fx issues there. I have a few hundred cash in US$ and S$, so I think I am pretty ok :D

 

Starting to worry a bit about our Alaska/Hawaii plan for 2014.

[The_Big_M]

So Ford announced today that they are withdrawing from manufacturing in Australia by 2016. Production costs here are four times that of Asia.

Let's hope the dollar slides further.

 

Except companies like Nissan and Mitsubishi withdrew years ago when the dollar was lower.

 

A lower dollar isn't going to change global oversupply of vehicles from low cost production countries. And we're not going to be low cost unless wages go to equivalent of a couple of dollars an hour... not too sure how many want that?

[Fletch1]

Our dollar is $0.9398 this afternoon. How much more will it fall??

[Karennella]

The reserve bank would like to see it at around 80 cents. If the US recovery continues, it will keep sliding.

[The_Big_M]

Our dollar is $0.9398 this afternoon. How much more will it fall??

 

Over what period? :-)

[dizzy1948]

We have an election coming up .................watch and wait.

[The_Big_M]

We have an election coming up .................watch and wait.

 

Based on the trend so far, it's clear what the market is thinking about the forecast outcome!

[Aloha 1]

Refocusing back to the travel aspects, I would break this discussion into 2 parts:

 

For those traveling FROM OZ/NZ, I suspect the value of your currency will be in flux for several months and most likely decline in relative value against the USD, EURO, and GBP. If you have a way to lock in today's value for your upcoming trips or can pre load a debit card, I would do it.

 

For those traveling TO OZ/NZ from the States or UK, your currency will buy a little more. However, you must remember that in both countries, basic prices for goods/services may be on average higher than what you are used to at home.

 

My bottom line when traveling abroad from the States is, "It is what it is." Two years ago, the USD/EURO exchange rate meant a 40% premium for our purchases. This past month, it was only 28%! I felt like I had won the lottery:D Go out and enjoy your holiday. Don't fret the price because, "It is what is!"

[dizzy1948]

My bottom line when traveling abroad from the States is, "It is what it is."

 

And from anywhere else in the world. After all - it's only money :p

Some you win - some you lose.

Edited June 12, 2013 by dizzy1948

[TLCOhio]

Appreciate the added comments, insights, etc. Big news overnight on the sinking value of the dollar. Good news, for us, as we prepared for our early 2014 cruise. Not as good for those in Australia planning to travel overseas.

 

From The Age newspaper in Melbourne, Australia this morning, they have this headline: "Aussie dollar dives on US Fed moves" with these highlights: "The Australian dollar has fallen to 33-month-low after the US Federal Reserve tipped an end to its stimulus program. The Australian currency plunged as low as 92.62 US cents, down nearly 3 US cents from before the start of Fed chairman Ben Bernanke's comments. It reached as low as 92.42 US cents just before 11.40 am as new data out of China, Australia's largest trading partner, showed that its manufacturing sector weakened in June to a nine-month low. FXCM chief currency strategist John Kicklighter said the Australian dollar was losing its appeal as investors moved away from risker assets and back into the US dollar. 'People are going to take that move away from the Australian dollar, and exacerbate it. People are seeing equities starting to pull back, commodities are starting to pull back and the high-yielding currencies [like the Australian dollar] fall,' Mr Kicklighter said."

 

Full story at:

http://www.theage.com.au/business/markets/aussie-dollar-dives-on-us-fed-moves-20130620-2ojv1.html

 

THANKS! Enjoy! Terry in Ohio

 

We are looking forward to our first “down under” visit, Jan. 20-Feb. 3, 2014, Celebrity Solstice sailing, departing Sydney, going from Australia to Auckland/NZ doing 14 days on this ship we loved in the Med in June 2011. Plus, doing some pre-cruise options for Cairns/Port Douglas, the Rainforest and Great Barrier Reef, then Kangaroo Island near Adelaide before departing from Sidney’s scenic harbor. And, doing the mid-cruise ship over-night trip to and in Queenstown and then stopping in Hawaii on the way home to break up that long, long flight back. We have a nice and super active roll call going at:

http://boards.cruisecritic.com/showthread.php?t=1614754

Welcome to any who want to join us for this trip and/or travel along via the web as we get prepared for that "adventure".

 

 

Below are two charts from the Wall Street Journal that might illustrate what has happened during the past two months. First, this top chart shows how the Aussie dollar (in blue) has gone down with the NZ dollar (in red) showing roughly the same falling trend/pattern over this period. The second chart, also over the past two months, shows the Aussie dollar's downward movement and a red line comparing it to the fairly stable level of the U.S. dollar during this period.:

 

 

 

[TLCOhio]

Also, from The Australian newspaper today, they have this headline: "Australian dollar tipped to fall to US88c by World Cup 2014" with these highlights: "The Australian dollar is forecast to fall a further seven per cent between now and World Cup 2014 in Brazil, according to HSBC global currency strategists. That's both against the US dollar and the Brazilian real. The Aussie-US dollar exchange rate is expected to fall to US88c by June next year, HSBC says in its June 2013 Macro Currency Strategy Report. 'The US dollar is in the midst of a powerful rally,' HSBC's analysts write. While the Aussie is forecast to weaken against the US dollar in the next 12 months, it is still well above long-term averages against both currencies. Since the Australian dollar was floated in the 1980s its average value has been between US70c and US80c."

 

As background, HSBC is a British multi-national banking and financial services organization headquartered in London. It is one of the world's largest banks. It has its origins in Hong Kong and Shanghai, where branches were first opened in 1865. The HSBC name is derived from the initials of The Hongkong and Shanghai Banking Corporation. The Australian is the biggest-selling national newspaper in the country and a part of News Corp. that also owns the sole dailies in Brisbane, Adelaide, Hobart and Darwin and the most popular metropolitan dailies in Sydney and Melbourne. These papers are connected with Rupert Murdoch who controls the Wall Street Journal, The Times of London, etc. The Age is part of Fairfax Group that owns the Sydney Morning Herald and other large papers in Australia and NZ.

 

Full story at:

http://www.theaustralian.com.au/news/australian-dollar-tipped-to-fall-to-us88c-by-world-cup-2014/story-e6frg6n6-1226666905563

 

THANKS! Enjoy! Terry in Ohio

 

Did a June 7-19, 2011, Celebrity Solstice cruise from Barcelona that had stops in Villefranche, ports near Pisa and Rome, Naples, Kotor, Venice and Dubrovnik. Enjoyed great weather and a wonderful trip. Dozens of wonderful visuals with key highlights, tips, comments, etc., on these postings. We are now at 134,217 views for this live/blog re-cap on our first sailing with Celebrity and much on wonderful Barcelona. Check these postings and added info at:

http://www.boards.cruisecritic.com/showthread.php?t=1426474

[Karennella]

Nothing much happens in Australia that is newsworthy on a world scale. Read Bill Bryson's book for his perspective on that. I am not really sure how many other countries have a newsbreak for the results of the monthly meeting of the Reserve Bank on interest rates. Maybe someone can enlighten me.

Thus the sliding dollar becomes big news even though, as a google will reveal, it has always been volatile.

In the days before it was floated, we went on a six month overseas trip, and it was relatively much more expensive to do it in those days. The week before we left we woke up to the news that the dollar had just been devalued 17 and a half percent!

Maybe I am being relaxed about it now as there are no big trips planned right at the moment; we are bogged down with grandchildren and very elderly parents!

[The_Big_M]

I am not really sure how many other countries have a newsbreak for the results of the monthly meeting of the Reserve Bank on interest rates.

Maybe someone can enlighten me.

 

That's because there's always a focus on mortgage holders here. When interest rates are up it's 'bad' because mortgage holders pay more (though savers get more), and vice versa. There's first home owners grant, no capital gains on the home, and a raft of other home focused items.

 

And in the US, they primarily have a 30 year fixed rate, unlike our variable rate, so there is much less impact from rate changes. Once you buy, it's locked in for most.

 

Thus the sliding dollar becomes big news even though, as a google will reveal, it has always been volatile.

 

Australian outgoing travellers are up, and retail and manufacturing is down due to alleged complaints about the currency. It's been made more prominent and accessible, hence the media talks about it.

[Aloha 1]

As of today, the Aussie dollar buys US$.92. So, what's the relevance? Unless you are traveling FROM OZ to the US or Europe, probably no change. Your cost of goods will still be the same although cost of financing debt may creep up. If you are traveling TO OZ from the US or Europe, you get a "bonus" in that your money will buy a little more. It's the same scenario we Yanks have had to deal with the last few years. Travel anywhere except to Mexico and expect to pay more because our dollar bought less. The important fact to keep in mind is that currency fluctuates, should not be a factor in your vacation/bucket list planning, and should not make or break your trip due to a few percentage points of change.

[Jacs]

Unfortunately in Australia the petrol retailers use the dollar value falling as an excuse to put petrol prices up. The day the doller fell petrol was $1.35 a litre. The NEXT morning it had gone up to $1.58 at my local station. We saw it happen the last time we were below parity. The second any value dropped up went the petrol prices. So we do experience quite an immediate effect on the cost of living, particularly when so many people travel large distances for work every day. I live about 60km (37 miles) from work so when petrol prices go up, we feel it.

[Aloha 1]

Unfortunately in Australia the petrol retailers use the dollar value falling as an excuse to put petrol prices up. The day the doller fell petrol was $1.35 a litre. The NEXT morning it had gone up to $1.58 at my local station. We saw it happen the last time we were below parity. The second any value dropped up went the petrol prices. So we do experience quite an immediate effect on the cost of living, particularly when so many people travel large distances for work every day. I live about 60km (37 miles) from work so when petrol prices go up, we feel it.

 

Interesting. And of course the petrol you pumped had been in the tank before the dollar devalued and purchased wholesale at a cheaper rate. We are afflicted with the same nefarious schemers here in the States. I'm unfamiliar with how Australia gets it's crude. Do you import all of it or is there any domestic production?

[Jacs]

No we don't produce our own Crude, we have to buy it in, not exactly sure from where though. It's all hinged on the US dollar per barrel cost though. What I hate is they use the dollar falling as an excuse to put the price up, but they didn't drop the price when our dollar was strong!

[The_Big_M]

No we don't produce our own Crude, we have to buy it in, not exactly sure from where though. It's all hinged on the US dollar per barrel cost though. What I hate is they use the dollar falling as an excuse to put the price up, but they didn't drop the price when our dollar was strong!

 

Pricing is volatile, but the strong AUD definitely kept prices down more than they otherwise would have been. I remember when the US was suffering big increases earlier, but ours has stayed relatively stable for quite a while. If our dollar hadn't gone up as well at the time, we would have also had increases.

[Jacs]

^true, although I was more making the point that the petrol companies used the dollar falling to immediately put the prices up, but they didn't immediately drop them when the opposite happened.

[Kiwi Kruzer]

No we don't produce our own Crude, we have to buy it in, not exactly sure from where though. It's all hinged on the US dollar per barrel cost though. What I hate is they use the dollar falling as an excuse to put the price up, but they didn't drop the price when our dollar was strong!

 

I always thought, or had been led to believe , that Australia was self sufficient in oil.

 

 

[mr walker]

I always thought, or had been led to believe , that Australia was self sufficient in oil.

 

There is sufficient oil & gas for us to be self sufficient. The story has been that we need to import some oil to make some of the products as our oil is different to others (lower in Sulphur??). Some years ago the then govt introduced a levy to price match Aus oil with imported (parity pricing) in order to encourage exploration. Oil/fuel pricing is based on some Singapore index. I think it just comes down to that it is cheaper to import refined product than to produce the fuel here.

And here in Sydney we have the ubiquotus pricing cycle where the petrol price rises & falls in some predetermined pattern, that seems to have no relationship to published oil pricing or Fx rate.

Edited June 24, 2013 by mr walker

[Jacs]

Mr Walker has explained it much better than me :) To be honest I don't know the ins and outs of our petroleum industry, just that most of our petrol is from imported crude. I actually didn't realise we produced as much as we apparently do (thanks wikipedia), so there you go, you learn something new everyday :)

[TLCOhio]

There is sufficient oil & gas for us to be self sufficient. The story has been that we need to import some oil to make some of the products as our oil is different to others (lower in Sulphur??). Some years ago the then govt introduced a levy to price match Aus oil with imported (parity pricing) in order to encourage exploration. Oil/fuel pricing is based on some Singapore index. I think it just comes down to that it is cheaper to import refined product than to produce the fuel here. And here in Sydney we have the ubiquotus pricing cycle where the petrol price rises & falls in some predetermined pattern, that seems to have no relationship to published oil pricing or Fx rate.

 

Good added insights and background from mr walker and others. Appreciate the insights and added sharing.

 

From the Australian Financial Review yesterday morning, they have this headline: "Wait and see on dollar’s tourism impact" with these highlights: "Flight Centre’s managing director, Graham Turner, has said the falling Australian dollar could change the way people travel but there are no signs of that happening yet. 'There’s some conjecture that people travel more when there’s a strong Australian dollar but we haven’t seen that,' he told Financial Review Sunday. 'Previously, there seemed to have been no effect when the Australian dollar falls but we will see this time. It depends on how far the dollar falls and how quickly.' Mr Turner pointed to tourism as one industry that could drive growth in the Australian economy and potentially fill some of void left by declining mining investment. But he added that Australia’s high labour costs were a problem. He said in-bound tourism to Australia from countries such as the United States, United Kingdom and New Zealand had been weak, but he hoped the soft Australian dollar would help attract more tourists. 'One of the big problems is lack of flexibility in wages, and it’s not so much the amount, but the inflexibility that makes it difficult to run businesses in the tourism and retail sectors from our experience.' Westpac’s currency strategist in New York, Richard Franulovich, told Financial Review Sunday: 'There is certainly room for the Aussie dollar to fall a little bit lower in the near term'. Credit Suisse strategist Damien Boey told Financial Review the Reserve Bank of Australia must cut interest rates further to avoid sending the Australian economy into meltdown. Mr Boey said the central bank had misread market data and needed to slash interest rates to offset the slowdown in China’s growth. 'Our economy is incredibly exposed to China ... and that means commodity prices will be weaker for longer, and our mining sector and mining companies will be weaker for longer,' he said."

 

Right now in the Wall Street Journal, buying an Aussie dollar costs $0.9242. It earlier April, that cost had been over $1.05. Interesting insights and comments in the above-mentioned story.

 

Full story at:

http://www.afr.com/p/business/sunday/falling_dollar_will_change_tourism_EQ2uTI9n50fcn8g4tkiWaM

 

THANKS! Enjoy! Terry in Ohio

 

For details and visuals, etc., from our July 1-16, 2010, Norway Coast/Fjords/Arctic Circle cruise experience from Copenhagen on the Silver Cloud, check out this posting. This posting is now at 110,955 views.

http://www.boards.cruisecritic.com/showthread.php?t=1227923

 

 

From the Mon., June 24, Wall St. Journal, here is their chart showing the movements of the Aussie Dollar during the past two months:

 

[TLCOhio]

From the Sidney Morning Herald this morning, they have this headline: "$A falls as gold price loses ground" with these highlights: "The Australian dollar is lower after the price of gold fell below $US1,200 an ounce for the first time in almost three years. At 1700 AEST on on Friday, the local unit was trading at 92.62 US cents, down from 93.17 cents on Thursday. During morning trade, the currency fell as low as 92.15 US cents, its weakest level since Tuesday. ForexCT head of research Steven Dooley said the gold selloff could have something to do with the US Federal Reserve's comments on scaling back the $US85 billion-a-month bond purchase program, designed to stimulate the American economy."

 

In the Wall Street Journal this morning at 10:38 am, they that Aussie dollar costing just $0.9175, a new recent low.

 

Full story at:

http://news.smh.com.au/breaking-news-business/a-falls-as-gold-price-loses-ground-20130628-2p0qp.html

 

THANKS! Enjoy! Terry in Ohio

 

For details and visuals, etc., from our July 1-16, 2010, Norway Coast/Fjords/Arctic Circle cruise experience from Copenhagen on the Silver Cloud, check out this posting. This posting is now at 111,370 views.

http://www.boards.cruisecritic.com/showthread.php?t=1227923