Australian Politics Forum - Australian dollar collapses- DONT PANIC!!!

Daves2017 Gold Member Offline Australian Politics Posts: 1116 Gender:	Australian dollar collapses- DONT PANIC!!! Jan 5^th, 2025 at 10:14pm Your Australian $$ are still acceptable in Argentina, N.Z , the Cook Islands and Western Australian . For now.🤬
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Bobby. Gold Member Offline Australian Politics Posts: 105743 Melbourne Gender:	Re: Australian dollar collapses- DONT PANIC!!! Reply #1 - Jan 5^th, 2025 at 10:44pm 62 cents. It's scary - we now have pacific pesos.
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MeisterEckhart

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Re: Australian dollar collapses- DONT PANIC!!!
Reply #2 - 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.

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.

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Daves2017 Gold Member Offline Australian Politics Posts: 1116 Gender:	Re: Australian dollar collapses- DONT PANIC!!! Reply #3 - Jan 6^th, 2025 at 10:03pm Perhaps I should change my heading from “ don’t panic “ to “ don’t travel “?
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MeisterEckhart

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Re: Australian dollar collapses- DONT PANIC!!!
Reply #4 - Jan 13^th, 2025 at 9:13pm

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.

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greggerypeccary Gold Member Offline Australian Politics Posts: 138184 Gender:	Re: Australian dollar collapses- DONT PANIC!!! Reply #5 - Jan 13^th, 2025 at 9:18pm 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.
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MeisterEckhart

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Re: Australian dollar collapses- DONT PANIC!!!
Reply #6 - Jan 13^th, 2025 at 9:21pm

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

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.

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.

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Jasin

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Re: Australian dollar collapses- DONT PANIC!!!
Reply #7 - Jan 13^th, 2025 at 9:55pm

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

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.

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.

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AIMLESS EXTENTION OF KNOWLEDGE HOWEVER, WHICH IS WHAT I THINK YOU REALLY MEAN BY THE TERM 'CURIOSITY', IS MERELY INEFFICIENCY. I AM DESIGNED TO AVOID INEFFICIENCY.

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freediver

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Re: Australian dollar collapses- DONT PANIC!!!
Reply #8 - Jan 14^th, 2025 at 9:18am

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.

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« Last Edit: Jan 14^th, 2025 at 9:23am by freediver »

People who can't distinguish between etymology and entomology bug me in ways I cannot put into words.

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MeisterEckhart Gold Member Online Australian Politics Posts: 12696 Gender:	Re: Australian dollar collapses- DONT PANIC!!! Reply #9 - Jan 14^th, 2025 at 10:07am 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.
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Daves2017 Gold Member Offline Australian Politics Posts: 1116 Gender:	Re: Australian dollar collapses- DONT PANIC!!! Reply #10 - 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.
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Bobby.

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Re: Australian dollar collapses- DONT PANIC!!!
Reply #11 - Jan 14^th, 2025 at 4:55pm

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.

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freediver Gold Member Online www.ozpolitic.com Posts: 49185 At my desk.	Re: Australian dollar collapses- DONT PANIC!!! Reply #12 - Jan 14^th, 2025 at 5:00pm Only to the US. I don't think exchange rates to other currencies have been affected much.
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Jasin

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Re: Australian dollar collapses- DONT PANIC!!!
Reply #13 - 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+ ?

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AIMLESS EXTENTION OF KNOWLEDGE HOWEVER, WHICH IS WHAT I THINK YOU REALLY MEAN BY THE TERM 'CURIOSITY', IS MERELY INEFFICIENCY. I AM DESIGNED TO AVOID INEFFICIENCY.

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Bobby. Gold Member Offline Australian Politics Posts: 105743 Melbourne Gender:	Re: Australian dollar collapses- DONT PANIC!!! Reply #14 - Jan 14^th, 2025 at 5:02pm 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.
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