Can the exchange between pounds and NTD get worse?

Business Money
21

Officially it is a dirty float vs. a basket of currencies.

22

convering your cash to reminbi mightn’t be too bad a choice these days, given that RMB is due to strengthen.

23

We can’t have RMB,unless we have an account in HK or China.
And its interest rate is low.

Taiwan’s banks are ready for RMB exchang.
They just need government’s approval.
But don’t know when .

24

I’m curious if anyone here prefers converting to Canadian dollars. I hear it’s risen against the USD pretty well.

25

I made an Excel chart comparing the rates in which 6 different currencies have risen in value compared to the US dollar during the last 5 years. The 6 different currencies that I compared were:

Canadian dollar
British pound
Australian dollar
New Zealand dollar
Euro
Philippine Peso

(The Philippine Peso isn’t usually considered to be a commonly traded currency, but my maid is Filipino and she is always complaining about how her salary is worth less and less money when it’s converted to Philippine Pesos (because her salary is fixed in NT$). And that’s when I discovered that the US$ have been gradually decreasing more and more in value during the past 5 years compared to almost all currencies in the world except the ones which are pegged to the US$ like the Japanese yen, the Chinese Renminbi, the Hong Kong dollar, and the NT$.)

I just uploaded my Excel chart to the internet. You can download it from this website:

marknagel.com/foreign_exchange_rates.xls

As you can see from my chart, during the last year, among these 6 currencies, the one which has risen the most in value compared to the US dollar is the New Zealand dollar, which has risen 23%!

Surprisingly, during the last year, the Canadian dollar rose the least among these 6 currencies. It only rose 6%.

But strangely enough, if you go back to 3 years ago, the Canadian dollar rose the most (comparing the current values with the values as of August 1, 2004). The Canadian dollar has increased in value by 23% during the last 3 years!

And if you go back 4 years, then the Canadian dollar is still the leader among these 6 currencies! It has risen in value by 31% during the last 4 years!

But the New Zealand dollar is always a close second, so investing in the New Zealand dollar would also be a good idea. And don’t forget that during the last year, the New Zealand dollar rose 23% in value compared to the US$!

I didn’t include the NT$ in my chart yet because it is virtually pegged to the US$. But maybe I’ll make a new chart which shows how much each of these 6 currencies has risen compared to the NT$ instead of compared to the US$.

Mark

26

Thanks for sharing the chart.Good job !

New Zealand dollar and Australian dollar were the most popular currencies in past three years in Taiwan.
Since the New Zealand dollar has risen much more than ever and has risen for a while.
Can we expect it will appreciate more?
Could it be possible it has tipped the scales?

How do you think about the Renminbi ,Euro,and GBP?

Thanks!

27

I’m sure all currencies will continue to appreciate compared to the US dollar as long as the War in Iraq continues, which will probably be until the next US presidential election. The cost of the War In Iraq is now $448 billion and it is continuing to increase at the rate of $12 million per hour! And it’s funded by deficit spending! Also, this is only the actual amount of money that has been spent on the war so far, since March 20, 2003. It doesn’t even cover the cost of replacing equipment which has been destroyed (for example, all the tanks and armored personnel carriers that have been blown up by insurgents) or the amount of money lost by the U.S. post office in order to let anyone in the U.S. mail packages to the 155,000 U.S. soldiers in Iraq at domestic postal rates, even though Iraq is halfway around the world from the US! Also it doesn’t cover the cost of medical fees for the tens of thousands of soldiers who have become permanently disabled from the war. So the cost of the War in Iraq has been a major factor in the decline in the value of the US dollar over the past 4 years.

The Renminbi is loosely pegged to the US dollar, so its value has changed only 9% over the last 6 years . The NT$ and the Japanese Yen are pegged much tighter to the US dollar. Their values have only changed 5% over the last 6 years! And the Hong Kong dollar has changed only 0.3% over the last 6 years!

As for the Euro and the GBP, see my chart.

28

I have now updated my chart. See this website:

marknagel.com/foreign_exchange_rates.xls

Now my chart shows the appreciation of 14 different currencies (including the NT$) and three precious metals (gold, platinum, and silver) compared to the US dollar. Also, now I go back to August 1, 2001.

Here are the winners:

  1. Silver: Increased 202% in value over the past 6 years, compared to the US dollar! That means the current price of silver is more than 3 times the 2001 price! This is an average increase of 34% per year!

  2. Platinum: Increased 171% in value over the past 6 years, compared to the US dollar.

  3. Gold: Increased 148% in value over the past 6 years.

  4. New Zealand dollar: Increased 84% in value over the past 6 years.

29

I just divide by 33 for my poor ole USD’s. I guess it used to be 32 but I like my average ole 33.

30

[quote=“Mark Nagel”]I have now updated my chart. See this website:

marknagel.com/foreign_exchange_rates.xls

Now my chart shows the appreciation of 14 different currencies (including the NT$) and three precious metals (gold, platinum, and silver) compared to the US dollar. Also, now I go back to August 1, 2001.

Here are the winners:

  1. Silver: Increased 202% in value over the past 6 years, compared to the US dollar! That means the current price of silver is more than 3 times the 2001 price! This is an average increase of 34% per year!

  2. Platinum: Increased 171% in value over the past 6 years, compared to the US dollar.

  3. Gold: Increased 148% in value over the past 6 years.

  4. New Zealand dollar: Increased 84% in value over the past 6 years.[/quote]

Thank you,Mark.
It is very helpful.
I will read it as soon as I go back my home. :notworthy:

31

Average (or return p.a.) is 20.23% as you cannot just divide 202% by 6 years, instead you have to use the compound interest formula. Still pretty good though.

32

Average (or return p.a.) is 20.23% as you cannot just divide 202% by 6 years, instead you have to use the compound interest formula. Still pretty good though.[/quote]That is correct, you need the sixth root of 3.02 which is indeed about 1.2023 (20.23%)

I bet you used a calculator to work it out though.

33

Rascal, thanks for telling me about compound interest. I forgot about that.

Now I updated my Excel chart so that it shows the average annual compound interest for the appreciation of every currency compared to the value of the U.S. dollar. You can see it here:

marknagel.com/foreign_exchange_rates.xls

I also added a few more currencies.

From looking at the chart, it’s obvious that the precious metals have been increasing in value much faster than any currency, except for the past year.

Here are the winners for the past year:

  1. Thai Baht: 26%
  2. New Zealand Dollar: 23%
  3. Palladium: 16%
  4. Indian Rupee: 16%

Here are the winners for the past two years:

  1. Palladium: 38%
  2. Silver: 33%
  3. Gold: 24%
  4. Platinum: 19%
  5. Thai Baht: 18%

And here are the winners for the past three years:

  1. Silver: 25%
  2. Palladium: 20%
  3. Gold: 19%
  4. Platinum: 16%
  5. Thai Baht: 18%
34

It looks like Thai Baht is the winner compared to other currencies .

Could it be possible we earn the exchange rate but lose the interest rate or the other way around?

I converted my NTD to GBP last year.
At that time ,it was about 60-61NTD to 1GBP.
Now it is almost 66-67 NTD to 1 GBP.
My bank gave me the interest rate as 4.1%.
It was not the best but good enough.

Thanks for the chart again.
It is very helpful . :notworthy:

35

The Quid is not doing well. Recently rates very unstable and this weekend with the bitCoin drop, see if affects other currency,

1 Like
36

And now it’s 36 NTD to 1 GBP. Talk about a downfall.

1 Like