Exchange Rate Argh!!!!

[Guest Kiki]

Hi guys

 

Just checked this morning the exchange rate is 2.15. has it ever been this low and will it ever go up????

 

 

Kimberley x

[Guest Nick11]

Historically I think it went as low as 2.08. Can't see it improving myself. We were moaning at 2.39 last August , having missed out on 2.54 . At the end of the day it's a lottery. Sorry.

[Nicky]

Hiya.

We're watching the exchange rate with interest too as we were planning to rent out our house here and come over to Adelaide Jan 09, renting over there for about 12months and assuming we liked it then sell our house. You know, taking it all very slowly, no panic. Now we're starting to feel the pressure. Perhaps we should sell our house before prices fall too much, come over as soon as we get our visa (probably late summer) and buy sooner rather than later before house prices go up too much in Adelaide. Typical isn't it!! As you said, it's bit of a lottery.

 

I just want to get things moving now, getting fed up of just sitting around! Just waiting for police checks and medicals so shouldn't be too long now (she says!?!!)

[Guest Guzzler&Sas]

Hi,

 

Not a nice position for you guys waiting to exchange monies, the problem being that the Reserve Bank of Australia today announced that the Australian economy is still very strong, and they may have to have more interest rate rises to try and keep inflation in check.

 

Try to keep positive and good luck

 

Guzzler

[Guest caoimhe]

Yes it's very frustrating, we have been considering this move for 5 years and it was always me who held off, Stephen wanted to take the plunge years ago, am I sorry now we didn't make the move when house prices we at there peak here and exchange rate better but that just our luck. "SODS LAW" I think it's called:policeman:

[Guest ozzy wannabe]

Hi everyone

 

I have just this minute had a very depressing conversation with a guy at HIFX the last time the rates dropped as low as this was 10 years ago when it got as low as 1.89 and it took 4 years to increase !!!

 

He also explained that the interests rates in oz are expected to go up at least another 3 times this year!!! good news for those already over, there but not for those of us who have the money on the bank and are just waiting to go.

 

What do we do bite the bullet and take the low rate put it into an oz savings a/c at a high rate than were getting now, or risk waiting for it to hopefully go up in the next 6 months?

 

Any Ideas gratefully received.

 

who said that life was easy. I think that the easy part was getting the visa in the first place!!

 

 

From a very stressed Vicky

[Guest muppetbro]

hifx advice we received yesterday was its currently only going in one direction for a while yet - 2.10 was being mooted 6 weeks ago

 

anyone with $ now is the time to make a killing

 

house prices here will slow down to 8% i reckon - last weekend was the first signs that buyers are being more cautious but the median price now stands at $400k

 

i reckon the cost of living all things considered now is higher than the uk unless you earn a good salary over 70K p.a.

[Guest swampo]

It seems to be one thing after another. House prices in the UK fall then the flaming Australian $ exchange rate is so poor I think we will be living in a tin shack the way thisngs are going. All very depressing.

[Guest caoimhe]

Yeah but swampo let's keep telling ourselves in OZ the shack will be warm, if we stay our shack will either flood or be snowed in,

we need to keep positive somehow!!!

[Guest Kiki]

ARGH!!!!

 

i just want it to go uppppppp

 

Kimberley x

[Nicky]

Oh, it's so reassuring to know that we're not the only ones up against it. I know we're not alone but it's nice to read others who have the same questions/doubts (doesn't really help though, just nice to know!!)

 

 

Nicky

[Guest muppetbro]

http://hifx.com/marketwatch/market_news/headlines/us_bank_of_england_cuts_rates.aspx

 

the news just got worse - if the economy isnt stimulated soon and with further rises anticipated on the oz economy = further widens the gap which USUALLY means weakening pound against other currencies such as $ - housing markets usually reflect the health of the economy........

 

im watching like a vulture the markets at the moment - i cannot see any financial sence in exchanging to $ from £ at the moment - and as you have a 6 month window before tax penalties apply i would hope things can only be much better by then......surely???

 

knowledge extracted from my reading of local papers. financial advisor and bloomberg website whcih monitors currencies and updates every minute - very exciting

 

on a brighter note i made local tv sports news at the weekend and flew the union jack proudly in the state titles - fame wont change me :notworthy:but $ will

[Guest smit]

 

He also explained that the interests rates in oz are expected to go up at least another 3 times this year!!! good news for those already over,

Cant quite see hows its good news for us mortgagepayers!

 

As others have said, with the interest rates going in opposite directions, dont expect to see an improvement in exchange rates.

[Guest Dallas]

The way we are moving forward is by taking a longer term approach. In 10 years the exchange rate will be a distant memory and you will look back on the last 10 years spent in a sunny, happy, positive and energetic place and wonder what all the stress was about.

 

We went to dinner and out of the 16 people there 12 of them wanted to leave the UK for a better way of life. Once you get to Australia you will struggle to meet an Australian that wants to leave Australia for a better way of life.

 

Don't get caught up looking at the move purerly on a £££ to $$$$ its a part of it but only a small part.

[Guest Guest75]

 

on a brighter note i made local tv sports news at the weekend and flew the union jack proudly in the state titles - fame wont change me :notworthy:but $ will

 

Funny I thought of you as I caught a glancing look at a piece on the TV about your sport - It could have been you I saw

[Guest Guest75]

It is not that good at the moment ( apart from Mr Muppet:p)

 

I was talking to our currency exchange company yesterday and there is no forecast.

One comment was "We need a good war to shift the rate"

 

Sorry I'm not that desperate yet.

 

Historically the Oz $ has been all over the place.I know people who moved here when the rate was $2 to 1 pound.One older gentleman remembers the rate being 1 to 1 when he moved over

[Guest Shy Ted]

I've done a lot of research recently into the whole financial side of moving ready for our move in the summer and here is the top and bottom of it;

 

If you look at the forward contract rates that major FX Dealers are offering presently you see a slight (and I mean slight) recovery over a 2 year period, they are offering around 2.22 for a 12 month fwd and 2.29 for a 24 month fwd, so that should give you as cast an idea of where the FX market is going. That said, those rates will be ultra cautious so you may see one or two cents more if you wait , but then again, you might not.

 

In real terms, you can forget in the short term (2 years plus) the historical rates of 2.40+, you can't help that now and you would be wise to forget about it as that chance has gone. But I don't see that as our real enemy here. If you wait, say, 12 months to exchange, you might make a few thousand quid, but property growth in Adelaide is forecast to buck the slowing national market trend and return a rise of around 8% this year, and I see that as conservative to be honest. So whatever you make by delaying your fx trade will probably be written off (and then some) against the increase in your property purchase price.

 

One bit of good news though! Although the doomsayers in the UK reckon the housing market will collapse, all the market trends suggest the market will remain steady, so you're not likely to lose at this end. So, if you consider the UK housing market has outperformed any other in the world over the last 5 years by a long chalk, we are still miles ahead financially when we liquidate property to emigrate. Presuming you've had a property of course!

 

In summary, if you (we!) could have moved a year ago you would have done better financially than you might today. BUT, absolutely no point in hanging about now as that will only cost more and more wealth, in real terms. Ignore the schardenfreude sentiments and take your chances now. Things are still very much in our favour, just not as much as they were.

 

Bit harsh I know! But I know how you feel. I'm in the same boat!

[Guest Rachel1477]

The way we are moving forward is by taking a longer term approach. In 10 years the exchange rate will be a distant memory and you will look back on the last 10 years spent in a sunny, happy, positive and energetic place and wonder what all the stress was about.

 

We went to dinner and out of the 16 people there 12 of them wanted to leave the UK for a better way of life. Once you get to Australia you will struggle to meet an Australian that wants to leave Australia for a better way of life.

 

Don't get caught up looking at the move purerly on a £££ to $$$$ its a part of it but only a small part.

 

Well said!!!! :notworthy:I don't think I could have put it better myself. I can understand (and I really can) why some get bogged down in the material wealth thing... but for me... even if it went down to 1 for 1... I'd still be wanting to go! Being 100% mortgage free isn't the driver for us... but lifestyle, opportunity, climate, family ... need i go on...?

 

The exchange rate is what it is.. yeah - box clever and you may get more $ for yoru £s... but if it was just about being cash rich... there are a million places we could go instead of Oz! And yes.. I do appreciate getting caught up in such worries so am not belittling anyones worries... I'm just trying to help put it into perspective . Hell.. if we'd been born a few decades before - we could have been £10 poms instead of the £1000's that we are all forking out to follow our dream! :goofy:t

[Guest ali@51]

Hi everyone

 

I have just this minute had a very depressing conversation with a guy at HIFX the last time the rates dropped as low as this was 10 years ago when it got as low as 1.89 and it took 4 years to increase !!!

 

He also explained that the interests rates in oz are expected to go up at least another 3 times this year!!! good news for those already over, there but not for those of us who have the money on the bank and are just waiting to go.

 

What do we do bite the bullet and take the low rate put it into an oz savings a/c at a high rate than were getting now, or risk waiting for it to hopefully go up in the next 6 months?

 

Any Ideas gratefully received.

 

who said that life was easy. I think that the easy part was getting the visa in the first place!!

 

 

From a very stressed Vicky

 

 

I had the same comments from HiFx just after Christmas re the low point of $1.98 and a 4 year recovery period. His memory must be a little bit iffy (or maybe the salesman in him wants you to exchange with them asap!) because if you look at the historical rates it simply isn't true.

 

I have been using the ozforex website (www.ozforex.com.au) to look at the historical rates over the last few years. If you go onto the section that shows the long term charts you can look at the rates as far back as June 1994. I have been through these to try and identify the trends. What I did was look at the major peaks and troughs to get an idea of the cycles in the exchange rate and the length of time that periods of appreciation and depreciation went on for. I did this ignoring the many regular ups and downs but looked at the overall underlying trends.

 

It undoubtedly shows me for what I am - a sad accountant but I will share the data for anyone who is interested. The low point was a rate of $1.89 back in circa April 1996. The exchange rate then increased in general terms for circa 29 months until about September 1998 to a high of $2.90. Within this period it took 14 months to hit $2.40. For me the $2.40 rate is key as the average exchange rate over the period that Ozforex provide data is $2.43.

 

The major periods of the rate going up or down, along with the starting and ending rates within each period, have been as follows (again the time periods and rates are approximatins and anyone can and should check these to Ozforex's own site themselves)

 

June 1995 - April 1996 2.2376 to 1.8903

April 1996 - September 1998 1.8903 to 2.9064

September 1998 - July 1999 2.9064 to 2.3341

July 1999 - September 2001 2.3341 to 3.0207

September 2001 - June 2002 3.0207 to 2.6475

June 2002 - August 2002 2.6475 to 2.9506

August 2002 - October 2003 2.9506 to 2.3910

October 2003 - April 2004 2.3910 to 2.4662

April 2004 - August 2005 2.4662 to 2.3094

August 2005 - February 2007 2.3094 to 2.5416

February 2007 - Today 2.5416 to 2.1870

 

Not sure if the above (apologies for the slightly jumbled layout couldn't get the spaces to stick) will be of any help to anyone but I thought I'd share it. If nothing else now everyone knows what Ali has to put up with

 

Morgan

[Guest ali@51]

I've done a lot of research recently into the whole financial side of moving ready for our move in the summer and here is the top and bottom of it;

 

If you look at the forward contract rates that major FX Dealers are offering presently you see a slight (and I mean slight) recovery over a 2 year period, they are offering around 2.22 for a 12 month fwd and 2.29 for a 24 month fwd, so that should give you as cast an idea of where the FX market is going. That said, those rates will be ultra cautious so you may see one or two cents more if you wait , but then again, you might not.

 

Don't wish to sound picky, start an argument or be a smart so and so but the forward rates aren't an indication of the likely direction that the rate will go in. I thought this too until I started looking into the currency transfer side of things.

 

The forward rates are calculated as a function of the current (spot rate) and the relative interest rates in the 2 respective countries. As the spot rate moves so does the forward rate.

 

To aid understanding for anyone interested who may be as clueless on these things as I am the text below is copied from the Ozforex website and explains how the forward rate is calculated:

 

 

However most market participants want to exchange the currencies at a time other than two days in advance but would like to know the rate of exchange now. For example if ABC Ltd had contracted to purchase a machine for the price of USD 1 million payable in 6 months time but wanted to be sure that the USD would not become too strong in the interim. ABC Ltd could agree now to buy the USD for delivery in 6 months time. In other words ABC Ltd could negotiate a rate at which it could buy USD at some time in the future, setting the amount of USD needed, the date needed etc. and hence be sure of the Australian Dollar purchasing price now.

 

In determining the rate of exchange in six months time there are two components:

 

1) the current spot rate

2) the forward rate adjustment

 

The spot rate is simply the current market rate as determined by supply and demand. The forward rate adjustment is a slightly more complicated calculation that involves the interest rates of the currencies involved.

 

Let us make a few assumptions about the markets:

 

AUD/USD spot rate: .6600

AUD 3 month interest rates is 6 %

USD 3 month interest rates 6.5 %

 

Now what is the forward adjustment that is made and why?

 

The forward rate can be calculated as follows: Forward rate = (.6600+(.6600*.065*90/360)) / (1+(1*.06*90/365)) = .66095

 

This equation may look a little complex at first and in practice your financial institution will calculate it for you.

 

If you defer the value date of a spot transaction each party will have the funds that they would have paid to invest. The person who sold Australian Dollars has those Dollars to invest for 90 days which assuming it was A$100 would equal A$ 101.4795. The person who sold US Dollars has those Dollars to invest for 90 days which assuming it was USD 66 would equal USD 67.0725 at the interest rates above. The forward rate is calculated simply by dividing 67.0725 by 101.4795 equalling .660947. If the forward rate was not calculated as such one party would be receiving an unfair advantage by deferring the exchange of currencies.

 

 

Just thought I'd share this to help cure anyones insomnia!

 

Morgan

[Guest louiesmum]

Well said!!!! :notworthy:I don't think I could have put it better myself. I can understand (and I really can) why some get bogged down in the material wealth thing... but for me... even if it went down to 1 for 1... I'd still be wanting to go! Being 100% mortgage free isn't the driver for us... but lifestyle, opportunity, climate, family ... need i go on...?

 

The exchange rate is what it is.. yeah - box clever and you may get more $ for yoru £s... but if it was just about being cash rich... there are a million places we could go instead of Oz! And yes.. I do appreciate getting caught up in such worries so am not belittling anyones worries... I'm just trying to help put it into perspective . Hell.. if we'd been born a few decades before - we could have been £10 poms instead of the £1000's that we are all forking out to follow our dream! :goofy:t

Hi

Yes I have to say we also have been fretting about the exchange rate, esp Neil, but like you said its not all about the money, we would make the move what ever, I'm trying not to look at what it was yesterday or last month you can only deal with today & try & make the best decision. Then you cant think if it goes up should have held on a bit longer etc. lets just hope it improves in the near future:wacko:

[Guest Shy Ted]

That's me put on my arse then. I'll stick to radiology!

[Guest graandjac]

That's me put on my arse then. I'll stick to radiology!

Well i liked it Ted....!!!!! i think that we all agree in the same direction, one plus side is when our money gets there the intreat it will earn will be higher than any uk bank....just looking for a bright glimmer through the dull exchange rate. Cheers raham

[Nicky]

I agree with you that it's not all about the money and ideally we would like to be mortgage free or certainly have very little mortgage ourselves. But my OH and myself are at loggerheads about it too. He wants to sell our house here while the market is still bouyant and get a good price for it and but I want to rent for 6months first to make sure coming to Oz is the right decision for us, as a family. I'm prepared to take the risk on the exchange rate etc as you've got to take risks somewhere along the way and hope that it all pans out alright. Unfortunately when you haven't got alot of money to throw around and every penny counts you do find yourself getting a git wrapped up in the £/$ thing and it does become bit of a issue.

 

It's all very well reading different forecasts and listening to different 'experts', but do they really know whats going to happen? Does anyone? I'm afraid my faith goes about as far as keeping my fingers crossed! (but my OH would say thats me just burying my head - he's probably right)

[Guest swampo]

I agree with those comments.Just wish I had had the forethought to hold the $ last August, but everyone has a degree in hindsight as they say!

 

Just have to look for a smaller house in Oz and make do with a bucket instead of a swimming pool! At least the sun will shine on a regular basis, the pace of life will be more relaxed (unless there gets to be too many Brits over there to change it to the rat race we are all trying to get away from over here). You can't change yesterday you have to take what comes today. Change your £ and get on with the $ life. (Although we will wait just a little longer to see if the rate improves....)

 

Kev & Mall