Buy it Now, AUD headed for $0.60

glend (Glen) · #1 02-09-2015, 08:22 PM

Most of the finance guys seem to be betting on a AUD of $ 0.60 USD by year end, in part due to the US Treasury stated policy of raising interest rates in the coming months. The ramification of the continuing devaluation is that all astro gear will get more expensive for us in the near future, just have to look at how quickly it dropped from USD parity to the current $0.70.

All the local retailers selling imported scopes and equipment will have to raise their prices. So regardless of who your buying from it could be a long time before your AUD is worth as much as it is today. If you have a scope on order, prepay what you can and maybe hold back 10%. Use currency hedging if your talking big $ - see your bank for how to do it.
Buy now from the local guys before their prices go up. Any local supplier that has his payment arrangement in USD is going to be impacted.

Camelopardalis (Dunk) · #2 02-09-2015, 08:25 PM

Glad I just bought my imaging scope then

MortonH · #3 02-09-2015, 08:30 PM

Even the Japanese prices have gone up a fair bit. A$465 for the new Vixen SSW eyepieces is rather high.

rustigsmed (Russell) · #4 02-09-2015, 09:23 PM

a nice heads up glen.

Russ

Somnium (Aidan) · #5 02-09-2015, 09:41 PM

I have been thinking about hedging my purchase with some USD, i may do it, but i am not sure if you are familiar with the research into the accuracy of predictions of these sought ... ultimately no one can tell the future, they are guessing

bugeater (Marty) · #6 02-09-2015, 09:52 PM

In my experience currency predictions tend to just assume the current trend will continue - if it's going up, they assume it will continue, if it is going down, they assume it will continue to go down.

That all said, our economy isn't in the greatest of shape right now with the mining sector softening, plus the US economy seems to be on an upwards trajectory. That would suggest a weakening of the AUD vs USD, but the question is how far? It's already weakened a lot.

Peter Ward · #7 02-09-2015, 11:14 PM

I disagree.

The ASX all-ords will be back around 5900 by years end.

Many Oz stocks are already paying 6-8% fully franked......it won't take long for the market to realize the $A is oversold and there is intrinsic value in many Oz companies.

I suspect the current manipulation of the $A is to get these assets even cheaper.

billdan (Bill) · #8 02-09-2015, 11:17 PM

The ABC news announced yesterday that Australia is now a Trillion dollars in debt for the first time. So that didn't help the poor Aussie dollar.

Looks like I'll have to delay my purchase of a MESU 200 mount again.

Bill

Peter Ward · #9 02-09-2015, 11:53 PM

Quote:

Originally Posted by billdan

The ABC news announced yesterday that Australia is now a Trillion dollars in debt for the first time. So that didn't help the poor Aussie dollar.

Looks like I'll have to delay my purchase of a MESU 200 mount again.

Bill

Well...bless the Trotsky trash at Aunty. (..BTW the conservatives don't have a clue either...)

a) While close, it's not a trillion
b) ABS statistics indicate it's peaked and is falling

Lies, dammed lies, and statistics. Gotta love 'em.

KenGee · #10 03-09-2015, 12:16 AM

Quote:

Originally Posted by Peter Ward

Well...bless the Trotsky trash at Aunty. (..BTW the conservatives don't have a clue either...)

a) While close, it's not a trillion
b) ABS statistics indicate it's peaked and is falling

Lies, dammed lies, and statistics. Gotta love 'em.

"Trotsky ABC" that's a very Boltish thing the say, don't let the facts get in the way of your insanity.

http://www.abc.net.au/news/2015-09-0...illion/6740328

billdan (Bill) · #11 03-09-2015, 08:26 AM

Sorry guys, I panicked when I saw the word Trillion, Peter is correct its only 976 Billion dollars.
Bill

ThatGuy (Guy) · #12 03-09-2015, 09:37 AM

Thanks for the post Glen.

http://www.smh.com.au/business/marke...01-gjczj9.html

Sydney Morning Herald had an interesting read yesterday on the current slump.

And over on the west our resource sector is going south due to a few factors but I don't think the sliding AU dollar is helping... let's hope house prices don't take a dive...

gregbradley · #13 03-09-2015, 09:44 AM

I've followed Aussie dollar USD trends closely for years. Its not hard to predict. Its like the long term stock market but simpler. Currencies tend to be very trending type commodities

Once they establish a clear trend they tend to stay in it as the factors that shift them seem to be slow moving and changing.

So in our case with a diminishing resources sector, stronger US economy, turbulent world stock markets these all lead to weaker Aussie dollar.

60 cents may seem really low but it went to 46 cents under our fearless leader Paul Keating on its way to being a Banana Republic.

It was around 65 cents for a long time also. So there is clear history for a 60 to 65 cent trading band. The trend is clearly down for the last year and a half.

The resources mining party is over but that doesn't mean gloom and doom though. RBA wants a lower dollar as it makes our exports cheaper. Its the covert currency devaluation that is no longer an option.

So I would say its way better than 50/50 odds it will see lower numbers and 60 cents is well within realistic probability. Markets like these look for bad news as a reason to go down further. Bull markets pick any good sign as excuse to go up. Its a frame of mind.

So I would seriously consider accelerating any US dollar based purchase at the moment as even though 70 cents now seems rubbish it will seem amazing if the dollar goes to 62c later.

Greg.

casstony · #14 03-09-2015, 09:44 AM

Quote:

Originally Posted by ThatGuy

... let's hope house prices don't take a dive...

Perhaps not a dive, but lets hope they recede to the long term trend so todays youngsters have some hope of buying a house for a fair price.

The whole financial system is sick with debt due to twisted central bank policies; things have to return to normal sooner or later and unfortunately the transition must be painful.

gregbradley · #15 03-09-2015, 09:50 AM

What twisted policies are you referring to? I thought the Reserve Bank Governor was actually pretty smart and doing a stellar job in a difficult and easy to criticise position.

One concern would be for the possibility of the Chinese economy melting down in a burst bubble as it has all the characteristics of those that have done just that. And also at the same point in its ascendancy just like the Japanese economy did back in the 90's when they were tipped to be the world's largest economy overtaking the US which never happened. If China bursts that would have massive downward pressure on our dollar and downward pressure on our economy.

Greg.

casstony · #16 03-09-2015, 10:02 AM

Doesn't make that much difference what our central bank does Greg; I was referring to the printing, borrowing and artificially low interest rates employed by the big northern hemisphere economies, producing mal-investment and bubbles in one asset or another, all the while amassing debt which necessitates reduced future economic activity while the loans are repaid. An alternative way of dealing with the debt is depression and default.
Modern governments and some individuals have forgotten how to live within their means and it will come back to bite us all.

Allan · #17 03-09-2015, 10:06 AM

Quote:

Originally Posted by Peter Ward

I disagree.

The ASX all-ords will be back around 5900 by years end.

Many Oz stocks are already paying 6-8% fully franked......it won't take long for the market to realize the $A is oversold and there is intrinsic value in many Oz companies.

I suspect the current manipulation of the $A is to get these assets even cheaper.

The ASX won't be rallying 15% from here over the next 4 months, but typically what we see when the Aussie is low is an increase in company takeovers by well funded overseas entities looking at our cheap assets. That's an area where money can be made. Then spend the profits on Astro gear!

Greg is very close to the money. Since the dollar was floated, you could throw a dart at it around 75 cents. It trends around that value, and often the trend goes further and lasts longer than anyone predicts.

gregbradley · #18 03-09-2015, 10:13 AM

Quote:

Originally Posted by casstony

Doesn't make that much difference what our central bank does Greg; I was referring to the printing, borrowing and artificially low interest rates employed by the big northern hemisphere economies, producing mal-investment and bubbles in one asset or another, all the while amassing debt which necessitates reduced future economic activity while the loans are repaid. An alternative way of dealing with the debt is depression and default.
Modern governments and some individuals have forgotten how to live within their means and it will come back to bite us all.

Hi Tony,

Oh I see. Yes well the US has been living off the back of it being the international reserve currency for a long time (it gets cheaper interest rates because of that artificially higher demand for its currency).

Their Federal Rerseve ( Central Bank ) is not actually Govt Tony, its private if you can believe that. Its quite a story all by itself, hard to believe.

I agree I hope Australia (having one of the lowest amounts of Govt debt in the Western Countries) does not succumb to the lure of debt to solve budget and political pressures like the rest have.

Greg.

Peter Ward · #19 03-09-2015, 10:24 AM

Quote:

Originally Posted by KenGee

"Trotsky ABC" that's a very Boltish thing the say, don't let the facts get in the way of your insanity.

http://www.abc.net.au/news/2015-09-0...illion/6740328

I've seen too many a headline predicting the $A (up or down) that has turned out to be totally in incorrect.

It's the believing these soothsayer/analysts and their crystal balls that I find rather nuts.

BTW I'll happily take the cash difference between the actual number and a $ Trillion.......brown bags, and $100's will do

glend (Glen) · #20 03-09-2015, 10:38 AM

I would agree with Greg's assessment on the trend of the currency. I am sure that anyone that made an expensive astro purchase earlier this year when the AUD was at $0.80USD would be feeling very pleased with themselves right now. Trends tend to be self-fullfilling and need a fair amount of momentum change to overcome, and good news for us maybe farther away than we would like.