Aussie dollar could hit $US1.70 by 2014.

[fishing111]

Those importing big ticket items, i wonder, do you buy now, or take a punt and wait for the gravy that is predicted? Interesting times ahead i guess.




Aussie dollar could hit $US1.70 by 2014, predicts money guru Savvas Savouri

Tim Boreham
From: The Australian (http://www.theaustralian.com.au/)http://resources0.news.com.au/images/2010/10/20/1225940/984572-australian-dollar.jpg
The climbing dollar has been a boon for online shoppers and holidays. Picture: File Source: The Australian


Demand for Aussie resources fuelling rise
"Can't see annything to knock it off its perch"
The rising dollar: what it means for you (http://www.news.com.au/business/australian-dollar-continues-to-set-records-what-does-it-mean-for-consumers/story-e6frfm1i-1226046287835)THE Aussie dollar could hit $US1.70 in three years, according to one of the world's leading money experts.

The dollar, which peaked at a record $US1.10 last week, has been a boon for shoppers by making imports cheaper, slashing the cost of overseas holidays and keeping inflation down in the process.

Many believe that the dollar will dip later in the year but Dr Savvas Savouri, head of Toscafund hedge fund, claims it could keep on climbing, reaching $US1.30 by 2013 and $US1.70 by 2014.

"The simple fact is the appreciation of the Australian dollar will be extraordinary," He said that the huge demand for Aussie resources in China and India was fuelling the dollar's record run.

ANZ's chief executive Mike Smith agreed.
"I can't see that there is anything to knock it off its perch because it's not only the strong Australian dollar, it's also the weak US dollar," Mr Smith said.
"And when you think about what is happening in the US, I can't see them increasing rates for at least 18 months and that will have an impact."
Here is a quick guide to how the booming Aussie dollar will affect you.
Shopping: cheaper imported goods
A more valuable dollar is making it cheaper for retailers to import things from overseas. They can pass on these savings to shoppers.
Interest rates: likely to ease pressure
The high dollar is likely to restrict the Reserve Bank (RBA) to only one interest rate rise this year. This means less pressure on the household budgets because it will minimise increases in mortgage repayments.
Travel: cheaper airfares, more spending power
As Aussies can now buy more with their money overseas, they are also going to become more likely to travel abroad to do so.
And as the demand for flights rises, airfares will also become cheaper.
Petrol prices: a buffer against oil prices
Petrol prices have been rising – up almost 9 per cent in the latest inflation figures – but the dazzling Australian dollar is acting as a buffer, shielding motorists from even higher fuel costs.
Fueltrac general manager Geoff Trotter says petrol prices could be as much as 15 cents higher if the dollar had not gone on a record-breaking post-float run over the past 12 months

[Flex]

These predictions are from the same group contributing to the GFC...

I dont think anyone really knows what will happen in 3-4 years. If you wanna buy somthing then buy it now IMO

[deckie]

Someone's long Aussie ::)

Just ignore predictions...when you see any sort of euphoric predictions start coming from bull markets its red rag to a bull the pro market will bail out...the longer a bull run goes the more stupid predictions come out from those with vested interests. Anywhere around this price is great value. Can just as easily settle back to 95c-$1 and spend a year or two there.

[fishing111]

Agree, i'll 9 times out of 10 hang on to the bird in the hand, but makes you wonder at what there predicting. I'm the sort of chump that buy's something, no matter how well researched, then 2 months later, without fail, same item way cheaper..pisses me off no end.

[Lovey80]

Just depends on how long the US Fed Reserve keeps printing those trillions I suppose. The resources boom is fuelled by the appetite of China and India who need resources to feed the states appetite for cheap goods (in a nut shell). If the US Fed keeps printing the less purchasing power the yanks have to buy = Less the Chinese can sell to them = Less Aussie resources are needed. If by some miracle we diversify our industry base so that we aren't relying on the resources sector for growth then it is possible to see $1.70 exchange. But I highly doubt we will see a government take that step until it is too late.

[finding_time]

If the Aussie$ hits 1.70 were in the shite because it means AMERICA has tanked and in a very deep recession which is bad for every one.

[TimiBoy]

Yep, was it in 2007 they said "Parity any time soon."

BAM. Captain Marvel copped it right between the eyes. So will it be this time. I don't know what will change, but something will, it always does. As sure as eggs are eggs.

Cheers,

Tim

[wayno60]

A more valuable dollar is making it cheaper for retailers to import things from overseas. They can pass on these savings to shoppers.

but they wont....it'll be straight in the back pocket.

[albey]

There is also the flip side--exports are dearer-and thats the reason it wont happen.the $ would be revalued long before those figures are reached.

[svranjic]

I would completely ignore predictions such as this one. I sat around whilst the AUD was at $1.10 thinking nah everyone is predicting it to keep going up and look it dropped 4 or 5 cents in a couple of days.

Our economy is strong but that's not to say confidence in our economy is strong. Silver has been going up ridiculously fast and then all of a sudden it dropped 10% over night. The type of people and organizations who invest in currency can pull their money out very quickly - as they say the AUD goes up by the stairs and down via the elevator.

If the AUD hits 1.70 as someone else said we are gonna be in the shit because the yanks will be utterly screwed.


It wouldn't surprise me if the pack of clowns whom call themselves our government decided to introduce a tax on people importing goods from overseas if it hit $1.70. I can see it now that stupid red haired monkey with her hairy armpits heeding the calls of Gerry Harvey to protect his shitty business by taxing the hell out of all us "Osralians" (How she pronounces Australians :-? )

[nigelr]

IMHO nup. Never has been, hopefully never will be.
If it does, be afraid, be very afraid..........
Um, cheers.....

[Dignity]

There are plenty of other predictions around for another big GFC next year so spend it now, you are dead a long time :)

[FNQCairns]

I would completely ignore predictions such as this one. I sat around whilst the AUD was at $1.10 thinking nah everyone is predicting it to keep going up and look it dropped 4 or 5 cents in a couple of days.

Our economy is strong but that's not to say confidence in our economy is strong. Silver has been going up ridiculously fast and then all of a sudden it dropped 10% over night. The type of people and organizations who invest in currency can pull their money out very quickly - as they say the AUD goes up by the stairs and down via the elevator.

If the AUD hits 1.70 as someone else said we are gonna be in the shit because the yanks will be utterly screwed.


It wouldn't surprise me if the pack of clowns whom call themselves our government decided to introduce a tax on people importing goods from overseas if it hit $1.70. I can see it now that stupid red haired monkey with her hairy armpits heeding the calls of Gerry Harvey to protect his shitty business by taxing the hell out of all us "Osralians" (How she pronounces Australians :-? )

This is typical overall the dollar wil behave the same as most stocks will, effectivly it follows by the same rules when charted, so if a person needs something right now then don't delay because there will multiple retraces, multiple upthrusts some sideways movement over time in our dollar but if a line over this time is smoothed through it the direction is atm, and is tipped to continue UP into the medium term.

Lots of reasons they think this too many to type here but suffice to say that without any truly new and deliberate intervention to pull our dollar down or some political/natural catastrophe we should see a higher AUD against the USD into the future.

None of it has anything strictly to do with our government...yet.

[deckie]

None of it has anything strictly to do with our government...yet.
Wouldn't go that far. What any government does has a fair old impact ;D

Much of what we're seeing is more the weakness of the $US across the board rather than just the aussie being strong...trend is up and likely higher short term but thats pretty much because we have a rising rate environment and thats largely due to the inflationary impact of government policies. Once u take out the price of banana's and electricity, seasonal stuff also things aint looking too rosey.

They are proving to be a mob that doesnt like to show long term fiscal restraint coming after a gov't that showed a lot of it...short term popularity driven spending is common in minority gov'ts. Lots of big spending, big grand projects and plenty of knee jerk policy making hoping to hit a nerve in the polls. The only thing effectively stopping higher rates here at the moment is the $ doing a fair bit of the work of the reserve bank.

The way they've been purposefully leaking the prettier aspects of this budget to the press over the last week is a bad sign they're a bit panicky. They're desperate for us to not notice the deficit and believe its somehow under control.

I'm a classic swinging voter and becoming extremely concerned...it truly pisses me off we've returned to the bad old days oif running MASSIVE deficits in such a short time. Whilst much was GFC packaging there just isnt anything concrete to reign it back in...and we NEED that rather than handing pensioners a set top box and pandering to the tree huggers for survival.

[FishHunter]

In the 70's it was US $1.75 to 1 South African Rand, its now about R8 to $1and has been as bad as R12.

The point is thangs can go either way no matter what the greed mongers are predicting.

[NAGG]

For my way of thinking - with the A$ up around US$1.10 ..... take advantage of it now . Import the things you wanted to import , take that overseas trip - why wait for something that may or may not happen ? - The dollar is great value now. I'm sure you'll find something else to buy in 3 years time if the A$ hits US$1.70.:P

btw ...... why are we not seeing the price of imported goods falling ?


Chris

[stue2]

Never been sure how this all comes together but at $1.70 would Aussy markets take a bit of a hit?Being a farmer this is scary

But havent the other currencies performed well against the greenback?

I imagine that importing countries would take advantage of this and bash our exports around.

We are not as stable as some may think. I always thought that $42B only post poned the GFC.
Just like the NBN role out. When you see everyone using wireless connections it doesnt make sense to me to role out expensive fibre.

cheers, Stu

[trueblue]

high dollar is not good for our country, on many, many fronts. way too complicated to go into great detail, but suffice to say that as a country we lose more with a high dollar than we gain

[wrxhoon]

high dollar is not good for our country, on many, many fronts.
Thats for sure .


way too complicated to go into great detailVery complicated but market forces ( as we have a free currency for 25 years now) will see that our $ and other currencies ( as long as they free ) find fair value .
In the case of our $ because we are small economy it can be manipulated by currency traders to their advantage. The other thing markets always over react up and down.
With our $ now everything is cheap in USA for us, one of two things will happen, their goods will increase ( read inflation) or their currency will go up againiest ours.

,
but suffice to say that as a country we lose more with a high dollar than we gainOf course low currency means everything imported is very expensive, local industry thrives the economy goes gangbusters. Don't go far have a good look at China, they are holding their currency low.

[siegfried]

Who knows what the New York jews will do, syre as shit it wont be any good for the average bloke, buy your o/s stuff now and enjoy.

[stue2]

Don't go far have a good look at China, they are holding their currency low

and refuse to float it.

Heard somewhere the US owes 16 trillion. It cost 3.8 trillion to service this loan and 4 t to stay on top of it. They aren't making the 3.8 at the moment.

Don't know how true this is but if it is their dollar may not jump too much too soon. China will have a full house and bluff some more.

buy your toys the price is good. I have and not allowed to any more.

stu

[trueblue]

Don't go far have a good look at China, they are holding their currency low

and refuse to float it.

Heard somewhere the US owes 16 trillion. It cost 3.8 trillion to service this loan and 4 t to stay on top of it. They aren't making the 3.8 at the moment.

Don't know how true this is but if it is their dollar may not jump too much too soon. China will have a full house and bluff some more.

buy your toys the price is good. I have and not allowed to any more.

stu

there is a big difference between individuals being able to buy toys at a good price with the AUD high, and the other side of the story which is that the high AUD is not good for the country.

by all means, enjoy the personal benefits of the high AUD, but don't fall into the trap of thinking that because there are small benefits that the high AUD is actually good for the country.........

[Lovey80]

Yes and no True blue. If the high AUD is accounted for because we have a diversified industry that sees a constant trade surplus at the same time as tight monetary policy by the RBA then the high AUD is a good thing. If you can manage to maintain a trade surplus while the dollar is rising then you are doing something right and the country is doing well. Our problem right now is that our trade surplus is pretty much solely on the shoulders of the mining industry while the rest of the country remains largely unproductive with a large government sector. This is the danger we have keeping on relying on the resources sector. We have a perfect opportunity right now to cover the other bases........but no the gov't just wants to milk the miners for all they are worth in the short term and some future government will have to pick up the pieces;

Cheers

Chris

[TimiBoy]

Yep, scarey. We're busy busting up Agriculture and Manufacturing to chase all this Climate Change Bullshit, while we rely on China to buy our resources and keep us afloat.

If China hits a wall, Swan's modelling a worst case scenario of a drop in export income of 4% will look like a walk in the park. I don't have much of a clue, but his arrogance is just unbelievable. I've read some predict up to 20%, which would be an unadulterated disaster for Australia, and we should be feeding what's left of Agriculture and Manufacturing to hedge against it.

But no, we will drive one offshore, and the other into the dust, just to appease some green ex hippy that's humping his leg.

Tim

[fat-buoy]

About 3 months ago someone said the Aussie dollar would break US1.10.. and I didn't believe it and then bam $1.10 comes around.. so I will stand undecided until I see it..... there will be some serious overseas buying if it does happen though. :)

[nigelr]

Good overseas buying for sure, but the mining boom would be history...........

[tunaticer]

I would like the dollar to settle somewhere for a yr or two. Whether it is 80c or 1.20 it does not matter, stability will matter more. If it stays within about a 5c range for an extended period it will be more attractive for investments both here and abroad. Currently investments in infrastructure, both public and private sectors, here are crap and look to be worse in the next 6 months.