Your Australian $$ are still acceptable in Argentina, N.Z , the Cook Islands and Western  Australian .

For now.🤬

62 cents.

It's scary - we now have pacific pesos.   :-[

Have no fear...

It's not the Australian dollar that's collapsing, but the US dollar that has been strengthening.

The DXY is at nearly 109.

Confidence in the US dollar started going through the roof after the US election.

If the war ends, the market may be expecting a massive US production wave of military equipment and infrastructure rebuilding projects in Ukraine.

Perhaps I should change my heading from “ don’t panic “ to “ don’t travel “?

For a clearer perspective on the state of the Australian dollar relative to the US dollar, multiply the current US DXY with the AUD-USD exchange rate.

When things are 'normal', the ratio will land between 67.5 to 68.5.

The higher this ratio, the 'stronger' the Australian dollar, the lower, the 'weaker' - as it is with the US dollar against the DXY

Currently, the DXY is at 110 - which indicates a strong US dollar. The AUD-USD exchange rate is  0.615... 110x0.615 = 67.65.

In mid-2022 the Australian dollar was 'strong' in that the ratio was around 74.

MeisterEckhart wrote on Jan 6^th, 2025 at 6:27am:

Have no fear... It's not the Australian dollar that's collapsing, but the US dollar that has been strengthening.

Well done, President Biden.

greggerypeccary wrote on Jan 13^th, 2025 at 9:18pm:

MeisterEckhart wrote on Jan 6th, 2025 at 6:27am: Have no fear... It's not the Australian dollar that's collapsing, but the US dollar that has been strengthening. Well done, President Biden.

No. It's to do with confidence in a possible future US economy... not the past.

There's an expectation that the US economy will improve.

As the DXY rose rapidly immediately after the US election, it indicates that the market is optimistic about the effect a Trump presidency will have on the US economy.

greggerypeccary wrote on Jan 13^th, 2025 at 9:18pm:

MeisterEckhart wrote on Jan 6th, 2025 at 6:27am: Have no fear... It's not the Australian dollar that's collapsing, but the US dollar that has been strengthening. Well done, President Biden.

Biden who?
Even the Media have forgotten about him.
Trump isn't even official yet and America and the World a feeling a lot better that things are on the up finally. Even peace in Gaza.

Peccary and Biden are much alike. Bad luck.

This will be good for Australian exporters - but only to the US.

https://www.marketplace.org/2024/11/18/us-dollar-strengthening-up-trump-exports-currency-exchange-markets-supply-demand/


Quote:

President-elect Donald Trump has promised to weaken the U.S. dollar as a way to improve the country’s exports to the rest of the world. And yet, the U.S. dollar has appreciated almost 3% since Election Day on the assumption that Trump’s policies may do the opposite of what he intends. “Most of the policies that President-elect Trump has talked about, at least in economic terms, are dollar-positive,” said Eric Winograd, chief economist at AllianceBernstein. That is, of course, despite his desire to weaken the dollar. Trump’s spending plans are expected to increase the deficit. The government will borrow more and pay more to do it. Investors want dollars to get in on that. The other dollar-growing item? Tariffs. “If you impose tariffs, we will presumably import less,” Winograd said. If the U.S. is importing fewer goods from foreign countries, it doesn’t need as much currency from foreign countries to pay for those goods. As a result, demand falls and those currencies weaken. “And that means that the dollar should appreciate as a result,” Winograd said. Markets are anticipating all of that, so the dollar has already started its upward move.

To add to market confidence, the US Federal Reserve has indicated that there will be few rate decreases (maybe none), after its regular FOMC meetings, in 2025.

I believe it’s definitely a trump effect.

The Pacific peso ( Australian dollar ) seems to have rebounded a little lately, Duddo leading the polls effect?

Not that I plan on holidays in Hollywood anytime this century.

Daves2017 wrote on Jan 14^th, 2025 at 4:42pm:

I believe it’s definitely a trump effect. The Pacific peso ( Australian dollar ) seems to have rebounded a little lately, Duddo leading the polls effect? Not that I plan on holidays in Hollywood anytime this century.

61.7 cents  -  lousy exchange rate for overseas travel.

Only to the US. I don't think exchange rates to other currencies have been affected much.

Australia has been at 60+Cents before, many times. Rarely at 90c+ at the most.
As always, the low value is justified by being great for trade, rather than a currency exchange rate for a holiday.
People who like spending money overseas on holidays are no different than those who import.

Does anyone know what the Australian dollar was worth?
When, during Lockdowns, Australians were still free to roam inside Australia with work and 'inside' trading, as it became the #1 Economy in the world for that period.

Did we bounce back up to 90c+ ?

freediver wrote on Jan 14^th, 2025 at 5:00pm:

Only to the US. I don't think exchange rates to other currencies have been affected much.

Yes -  $1.10  to NZ - that's OK.    :)

It's usually $1.20 for NZ

Jasin wrote on Jan 14^th, 2025 at 5:03pm:

It's usually $1.20 for NZ

Nah - it's been about a 10% advantage for 20 years.

Jasin wrote on Jan 14^th, 2025 at 5:01pm:

Australia has been at 60+Cents before, many times. Rarely at 90c+ at the most. As always, the low value is justified by being great for trade, rather than a currency exchange rate for a holiday. People who like spending money overseas on holidays are no different than those who import. Does anyone know what the Australian dollar was worth? When, during Lockdowns, Australians were still free to roam inside Australia with work and 'inside' trading, as it became the #1 Economy in the world for that period. Did we bounce back up to 90c+ ?

I can't understand economics -
the Yanks are $35 trillion in debt yet their currency is still high in value.

It was $1.20 when... oh yeah, I was last there in NZ 2008

It's a rigged economy for sure. Lol

Jasin wrote on Jan 14^th, 2025 at 5:09pm:

It's a rigged economy for sure. Lol

I think even the Yanky holdings of gold doesn't even add up to $1 Trillion
and that is  8,133 tonnes.
https://www.visualcapitalist.com/the-top-10-countries-by-gold-reserves-in-2024/

At a value of $86.5M per tonne that equals $692 billion.


Yet they are in debt for $34 trillion.   :o

China's yuan is given almost a 30 per cent weighting in the basket of currencies that matter to us, versus just 8.7 per cent for the US dollar.

China's property crash is bad news for Australia's economy, and there's even a risk it could precipitate our own housing crisis.

To a large extent, it is China's economic woes weighing on Australia.

For the past five years, it has been in the thrall of a debilitating property market collapse that has shaken its economy to the core, crimping national economic growth and causing a serious bout of deflation.

Given we're joined at the economic hip, global speculators often trade the Australian dollar as a proxy for China's health.

It's not great now and the bets are on that it will continue to deteriorate.

ABC


We shouldn't be joined at the economic hip to China. Not a trustworthy, reliable, friendly country to depend on.

While the Australian dollar is on the lower end of the relatively 'normal' range at 67.71, it's holding its own against a sustained strong US dollar at over DXY 109, which appears to be aiming at the strength it had in mid-2022 at over DXY 114.

freediver wrote on Jan 14^th, 2025 at 5:00pm:

Only to the US. I don't think exchange rates to other currencies have been affected much.

Absolutely they have

The AUD to the Euro has been steady for about 12 months.

The Euro to the USD is following the same trend as the AUD to the USD.

Bobby. wrote on Jan 14^th, 2025 at 5:07pm:

I can't understand economics - the Yanks are $35 trillion in debt yet their currency is still high in value.

The US dollar is currently the only world's reserve currency.

All nations need a reserve of US dollars to do business.

The whole point of a planned BRICS currency is to challenge the US dollar's monopoly on international trade.

Good luck with that! The US has been running the world's trade since WW2 with its dollar. 

The BRICS countries lack confidence in each other's currencies, and the key ones, China and India, are technically at war over their shared border... Russia is a basket case.

It's a good bet that none will ditch the US dollar in the next 20 years.

Quote:

All nations need a reserve of US dollars to do business.

Wrong.


Quote:

the US dollar's monopoly on international trade

The Euro and Yuan are already doing that. Even the Australian dollar is popular, well beyond what our GDP would dictate, due to our political and financial stability.

The US dollar is used in over 55% of all world trade - greater than all others combined.

Countries like Russia that have ceased (or were forced to cease) using the US dollar, rely on commodities like gold.

Quote:

The US dollar is used in over 55% of all world trade

Where did you get that number from?

55% is not a monopoly.


Quote:

Countries like Russia that have ceased (or were forced to cease) using the US dollar, rely on commodities like gold.

;D

Russia has been using gold as a strategic resource to trade for goods and hard currency since the invasion of Ukraine

https://www.euronews.com/my-europe/2024/12/09/what-is-the-role-of-gold-in-russias-wartime-trade-relations#:~:text=While%20Western%20sanctions%20have%20successfully,tonnes%20and%202%2C437.0%20tonnes%2C%20respectively.

How much of Russia's trade do you think is done with gold?

Where did you get your "over 55%" of all trade in US dollars figure from?

The way I see it gold is tied to the US dollar, how else can you value gold when you trade it. The weight of the gold in US dollars converted to local currency.

Gold has become a strategic resource for the Russian state since the invasion of Ukraine. It has a bearing on Russia's revenue generation capacity and its monetary policy; it is central to Russia's international campaign for de-dollarisation; it is a major feature of Russia’s engagement in Africa and Central Asia; and it plays an important part in Russia's wartime trade relations.

https://www.rand.org/pubs/research_reports/RRA3230-1.html

Russia's increasing reliance on gold for its international trade has, no doubt, contributed to the world gold price increasing by 27% during 2024.

That, and China's central bank significantly increasing its gold reserves since 2019.

In 2024 the top ten reported gold-purchasing countries gold were:

1.      Russia | 1,230.6 metric tons
2.      China | 1,210.2 metric tons
3.      Türkiye | 475.6 metric tons
4.      Poland | 295.0 metric tons
5.      India | 291.4 metric tons
6.      Kazakhstan | 132.6 metric ton
7.      Uzbekistan | 126.3 metric tons
8.      Singapore | 101.5 metric tons
9.      Qatar | 96.3 metric tons
10.      Hungary | 91.4 metric tons

Of them:

3 are major, founding member BRICS nations – Russia, China; India
2 are partner BRICS nations – Kazakhstan, Uzbekistan
3 are at war, preparing/ perceiving the threat of war – Russia, China, Poland
3 are experiencing significant economic uncertainty - Russia, China, Türkiye
2 are experiencing political uncertainty – Kazakhstan, Uzbekistan
1 is suffering hyperinflation – Türkiye

MeisterEckhart wrote on Jan 18^th, 2025 at 7:53am:

In 2024 the top ten reported gold-purchasing countries gold were: 1.      Russia | 1,230.6 metric tons 2.      China | 1,210.2 metric tons 3.      Türkiye | 475.6 metric tons 4.      Poland | 295.0 metric tons 5.      India | 291.4 metric tons 6.      Kazakhstan | 132.6 metric ton 7.      Uzbekistan | 126.3 metric tons 8.      Singapore | 101.5 metric tons 9.      Qatar | 96.3 metric tons 10.      Hungary | 91.4 metric tons Of them: 3 are major, founding member BRICS nations – Russia, China; India 2 are partner BRICS nations – Kazakhstan, Uzbekistan 3 are at war, preparing/ perceiving the threat of war – Russia, China, Poland 3 are experiencing significant economic uncertainty - Russia, China, Türkiye 2 are experiencing political uncertainty – Kazakhstan, Uzbekistan 1 is suffering hyperinflation – Türkiye

I expect a bit of gold price manipulation in the next 36 months, what are the chances of the US pushing down the price of gold and the effect that could have.

Leroy wrote on Jan 18^th, 2025 at 9:00am:

MeisterEckhart wrote on Jan 18th, 2025 at 7:53am: In 2024 the top ten reported gold-purchasing countries gold were: 1.      Russia | 1,230.6 metric tons 2.      China | 1,210.2 metric tons 3.      Türkiye | 475.6 metric tons 4.      Poland | 295.0 metric tons 5.      India | 291.4 metric tons 6.      Kazakhstan | 132.6 metric ton 7.      Uzbekistan | 126.3 metric tons 8.      Singapore | 101.5 metric tons 9.      Qatar | 96.3 metric tons 10.      Hungary | 91.4 metric tons Of them: 3 are major, founding member BRICS nations – Russia, China; India 2 are partner BRICS nations – Kazakhstan, Uzbekistan 3 are at war, preparing/ perceiving the threat of war – Russia, China, Poland 3 are experiencing significant economic uncertainty - Russia, China, Türkiye 2 are experiencing political uncertainty – Kazakhstan, Uzbekistan 1 is suffering hyperinflation – Türkiye I expect a bit of gold price manipulation in the next 36 months, what are the chances of the US pushing down the price of gold and the effect that could have.

National central bank purchases are responsible for the significant gold price surge and a post-COVID bounce.

There's little chance that the US would drive the price down, which usually occurs when the US dollar is strong. However, the US dollar and the gold price have recently both been strong and still are.

The key driver is, as usual, FUD... and writ large.

Fear of an imminent catastrophe - war, economic collapse.
Uncertainty regarding economic and political stability.
Doubt that the current world economic structure is good for business - i.e. the drive towards de-dollarisation.

A prediction for 2025...

The US dollar will remain strong and possibly reach DXY 115 to 120.

The Australian dollar will hold its own at 67.5 to 68.5 (DXY x USD exchange rate). A very strong USD - at over 115 - will drive the relative AUD exchange rate to below 60 US cents.

The gold price in USD will breach and sustain USD 3000 (approx AUD 5000...  3000 / 0.60).

While regimes like China's CCP encourage private gold buying (not least because the CCP can always confiscate it at will), many nations' central banks and governments are leery of private trading in gold for the same reasons they are about fiat.

Given this leeriness, they will not mourn the fact that the ridiculously high world price of gold is driving it out of reach for many private buyers, leaving gold to large financial institutions and governments.

One good thing about the gold price surge is that gold confiscation in Western countries is highly unlikely; its value will drive private gold holders to the gold traders' bullion desks uncoerced.