Would any statistically gifted economy expert with clairvoyant powers mind telling me what’s going to happen with the Aussie? 
But seriously, a year and a half ago, the rate was 20 NT to the Aussie, last May or so it started to go up, it went up to 26, and now it’s been hovering around the 23 to 23.5 mark for months. I’m waiting for it to go back down before I leave this joint! Any ideas? :s
Anyone who forecasts currencies doesn’t know what they are talking about.
On that basis 
:
The strength of the Aussie is really due to the weakness of the US dollar. So long as the US dollar weakens and the Taiwan government are unwilling to see the NT strengthen against the US dollar, the aussie will probably outperform the NT.
Why is the US dollar weak?
To (over)simplify*. Big current account deficit. Over the long run, the current account will balance. To get it to balance, US goods have to become more attractive compared to non-us goods. Two ways this can happen: deflation in the US (greenspan won’t let that happen); depreciation of the dollar (much less painful).
The only weakness in the Aussie could be a collapse in property prices there. But since any collapse in OZ property is likely to have followed a similar collapse in the US, the relative effect may be minimal.
I regard the recent strength in the USD as a short-term whatsit in a long-term weakening thingummybob.
*Oversimplified because - there are lots of short-term effects on the currency, such as interest rate expectations. Also, the deficit readjustment could come about not by deflation in the US but by INflation outside the US (still less likely though than exchange rate adjustment.)
Just a caveat - property prices have already deflated in Sydney and unit prices in Melbourne and Brisbane (I won’t say collapsed as it’s not been so dramatic, but they’ve unmistakably fallen). I don’t know what’s happening in the US, but if things haven’t cooled there, then it looks like we’re not waiting for anyone’s lead 
Of course Australia usually runs a huge current account deficit. The aussie will continue to weaken as long as there is speculation about a large US rate hike. Lower oil prices are likely to lead to higher US interest rates.
Many people think like IYBF that the US dollar will continue to weaken longer term. I think the US dollar will probably continue to rise relative to the aussie. But I don’t know if that’s logic or just wishful thinking.
Mr blue in the face:
What you could do with all this info is to get a large piece of paper, divide it into two by drawing a line in the middle and label the left “column” FOR and the right column Against.
Then for each factor that is mentioned by various people here that is likely to cause the Aussie dollar to appreciate against the US dollar, you list under the FOR column and award a weighting point between 1 - 10 according to how strong you think that factor is going to be. You do the same with the opposite AGAINST column for factors which are likely to cause the opposite.
Then after all of the above exercise, you come to a “conclusion” if you can call it that, that the Aussie dollar is more likely or less likely to appreciate against the USD.
Problem with this type of analysis is that you only get a “consensus” which is neither likely nor unlikely to be true because it is too subjective.
Also what no one has mentioned (so far) is the duration before this trend changes, and there is no reason for the trend line to be straight or the likely percentage increase/decrease for a give time frame (or the rate of appreciation/depreciation). i.e. the time factor is totally missing.
So you won’t even know how long you’d have to wait before profits or (unbearable) losses start piling up.
Anyway, just ignore what I have just said.
I think technical analysis or charting is superior to this type of opinion analysis. One factor which charting never leaves too far behind is time frame which is sort of missing in all this anecdotal expressions of opinion.
Just a caveat - property prices have already deflated in Sydney and unit prices in Melbourne and Brisbane (I won’t say collapsed as it’s not been so dramatic, but they’ve unmistakably fallen). I don’t know what’s happening in the US, but if things haven’t cooled there, then it looks like we’re not waiting for anyone’s lead [/quote]
I am in Brisbane and I am looking to buy a property and have been for a year… all this talk of a price collapse is mad. I havent seen it and the real estate agents I talk to are very optimistic. Auctions are slower, but prices aint budgin a bit. They may slow but they wont fall.
Just a caveat - property prices have already deflated in Sydney and unit prices in Melbourne and Brisbane (I won’t say collapsed as it’s not been so dramatic, but they’ve unmistakably fallen). I don’t know what’s happening in the US, but if things haven’t cooled there, then it looks like we’re not waiting for anyone’s lead [/quote]
I am in Brisbane and I am looking to buy a property and have been for a year… all this talk of a price collapse is mad. I havent seen it and the real estate agents I talk to are very optimistic. Auctions are slower, but prices aint budgin a bit. They may slow but they wont fall.[/quote]
Depends where you are, IMO. Sydney led the boom and it’s now feeling the pinch. There have been the usual run of stories in the paper where vendors refused a huge offer last year, only to have to sell it for much lower this year, in some cases over A$100,000 lower. The auction clearance rates are at all-time lows. So while talk of a outright collapse might be ‘mad’, the price deflation I described bloody well isn’t. It’s happening right now. I’ve been following the Sydney market for the past several years with the same purpose in mind, and the prices are finally starting to look halfway rational, although of course nowhere near the way they were before the boom. And you know, that’s exactly what Sydney agents were saying before it happened, too - they’re the same everywhere 
The situation in Melbourne and Brisbane I’m not as clear on, but I thought the inner-city apartment market had already softened (the first warning sign for the Sydney market), which is all I was saying. The property market is of course very segmented - the bigger price falls show up in the higher end of the market, and the investment segment, but the middle range home owner market just sits tight and waits it out, so prices tend to plateau, because they just won’t sell if they can’t get the price they want. That’s not to say some places in Australia aren’t still going great guns, but IMO the property cycle is exactly that - a cycle.
Daasgrrl,
I decided that it wasn’t worth the wait and just bought a small place in West End (Brisbane). I know a reliable real estate agent who’d be happy to impart some advice about the market without giving you the “hard sell”… Just let me know if you’d like me to refer you to her.
Cheers,
The Big Babou
Daasgrrl and Big Babou, do either of you know if a non Aussie is allowed to buy and own property in Aus.
[quote=“The Big Babou”]Daasgrrl,
I decided that it wasn’t worth the wait and just bought a small place in West End (Brisbane). I know a reliable real estate agent who’d be happy to impart some advice about the market without giving you the “hard sell”… Just let me know if you’d like me to refer you to her.
[/quote]
Appreciated, Babou, but I think it’s AWOL that needs the info - I’m a Sydney girl! Now that we’re in Taiwan we’re not aiming to buy for a while anyway and hope things become more affordable. Glad you’re set though. I think if you’re living in it and enjoying it it’s never really a bad time to buy a place (as long as one can definitely keep up the repayments, of course).
Traveller, dunno, but I was interested enough to look it up for you 
[quote]Q. Can I buy Property in Australia?
A. If you are not a resident of Australia and you wish to invest here, you can. Broadly speaking, foreign investors can buy residential real estate, which is:
1.) “Off plan” i.e., designed and approved by the relevant planning authority, (usually the local council or shire authority), where construction has not yet commenced.
2.) Under construction, but not yet completed
3.) Completed, but not yet lived in. Note: Once they have been lived in by a tenant, or owner, they cannot be legally sold to an “off shore” buyer.[/quote]
The rest is here
PS: Property that falls into these categories, particularly inner-city apartments - seriously overpriced, for the most part. Be warned. (3) is generally your best bet, but that probably applies everywhere.
Daasgrrl, thanks for that
I wrote something for this, than I am interrupted, then I begin all over again, then by the end of a few paragraphs, a whole week has gone by!! I wonder how some people do it…post everyday . This question which initially struck me as a “exchange rate” question suddenly ends up as an advice on Australian property! I decided to preserve my thoughts here instead of throwing away my writing? This thread seems to have died down.
Surely Australian property is not the ‘driver’ for the Aussie dollar to go up or down against the US dollar, at least not a major factor. Nevertheless what is also strange is that this question poser/blueinface asked for prediction against the Taiwan dollar which is even harder than predicting the price in US dollar. Most trader just use USD because if you use TWD, you get into a comparatively less traded currency, a ‘backwater’ currency which has other factors/implication of its own.
Most financial radio stations provide such fx trading advice against the USD on a regular basis ie weekly. That is the place I would refer on a regularly basis if I had substantial positions in Aussie dollar and I was trying to gain from the exchange rate fluctuations.
Anyway here is the piece and only if you have too much time:
[quote]I think Iamyourbiggestfan started off well and I agree when he said:
The strength of the Aussie is really due to the weakness of the US dollar.
I think there is a negative correlation between the two currencies but what we need to understand is what factors accounts for this negative relationship and whether this trend will last.
Then he explains why the US dollar is likely to be weak. I agree with his explaination next too.
And there is now even talk that Greenspan might even LOWER the interest rate after rising in stages for the rest of this year, beginning next year 2005 just to make sure housing and the US economy does not collapse. But then much of this talk may be political to ensure Bush is re-elected. Lower interest rates will continue to imply a lowering USD. Asset prices will increase, big debt bubble will be created slowly to sustain US growth rate. Finally inflation will come but that is another problem in the distant future hopefully.
But what makes the Aussie dollar exceptionally strong and rising between the period say Sep2002 and Aug 2003? Retrospective is always easier than forecast. I think the main reason to this is the biggest rise in commodity prices not seen in some 20 years. Check out the price of iron ore, aluminum, copper, tin etc., all or most of which Australia exports; commodities definitely
The Aussie dollar curiously enough has been influenced by housing prices all the aussies are aware of this and that’s why the thread took such a turn. Low interest rates in Australia, but relatively high interest rates in international terms along with the commodities prices boom led to the aussie dollar going gang busters. However,the RBA is now raising interest rates to cool an overheated property market, or housing inflation. This proccess is leading to up ticks in the aussie dollar. If the interest rate rises are successful in curbing housing inflation and interest rate hikes to curb cpi inflation are not really in the wings then interest rates will stabilize in Austalia. If then interest rates keep rising in the US the Aussie is likely to depreciate more.
It’s not true to say that Sydney’s housing prices are not driven by shortage. Sydney is where most migrants arrive and initially live in Australia. This places a big demand on property every year and helps to keep the Sydney property market hopping along. This coupled with Sydney being such a beautiful place to live. That attracts a lot of other Aussies too.
Sydney housing is pretty much unaffordable to most people.
But back to the Aussie, I saw this in the Asia Times:
Taiwan to attract billions in capital
Morgan Stanley Capital International, whose indexes attract over $3 trillion in capital, will remove the weighting of its Taiwan index next year, and that’s sure to attract billions of dollars. Good news for Taiwan, but bad news for Hong Kong, South Korea and others who likely will lose funds to the Taiex. - Mac William Bishop (Jun 28, '04)
Maybe keep it in nt until nexty year?
I was in Sydney last year around about April 2003. It is nice to hear that the outlook for property is going steady to upwards assuming the aussie dollar is doing the same in 2005. I certainly hope it does not crash or anything terrible other than a soft landing?. I have some friends who have invested in something since 2001. While I was visiting I was constantly being tempted to buy something there because some of my friends were in the property trade. They are sort of like small time property developers with their own drive-in DIY shop. The shop look huge to me so I guess they must be doing quite well. Everyone in the family also had their own a fancy sports car and the main owner shareholder had 2 mercerdes. their houses all had hugh gardens sometime even with private tennis courts.
My main concern with Sydney was that there just weren
Okay, I’ve been holding out, but I just can’t keep it up …
24.5???
Whassup w’that? Same as before? I read that the economic forecast for Taiwan was good this year. So what’s goin’ on? And even the Mei guo rate is worse - was 33, now 33.7 - so can’t put it into Mei guos.
Put me out of my misery. Tell me something i wanna hear - but only if it’s true, mind …
We’re in Oz sending $ back to Taiwan - and LOVING it!! 
[quote=“drambuie”]Finally Iamyourbiggestfan “falters” a bit by saying that:
The only weakness in the Aussie could be a collapse in property prices there.
This is attributing the strength of the Aussie dollar wholly from the strength of property prices - which is of course not true.[/quote]
Actually, logically, you are correct. There may be several reasons for a weakness in the Aussie. I wrote carelessly. I should have qualified it with an IM(ns)HO or something. A collapse in raw material prices that Oz exports might also have an impact on the Aussie.
But the point is that a collapse in property prices in Oz would not have effects limited only to that sector. But would have a knock-on effect throught the economy. it would slow investment into Oz and also domestic consumption. The trigger for a fall could be rising rates - somewhat counterintuitively, then, a property price fall can happen as the economy recovers.
I note that the US$ has started to weaken again. I do expect it to continue to weaken for some months. I am not betting on the Aussie sooo much. Mostly on other major currencies.