Will we finally see Parity with the Aussie dollar in 2015 ?

http://www.theage.com.au/business/ma...30-12fi7g.html

Interesting thoughts on food imports from Australia and historical high's against the Aussie dollar. Looking at the relative strength / interest rates / outlook of the two economies we should hit parity in 2015 at some stage surely ?

It would be nice to see $1 mango's over here, but this guy doesn’t think it will hit parity;

http://www.scoop.co.nz/stories/BU141...nst-aussie.htm

I'm in the NO WAY JOSE camp. Not saying it won't go higher but parity is an extreme.

There's a good thread already on the Forex section btw ;)

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Originally Posted by BFG

I'm in the NO WAY JOSE camp. Not saying it won't go higher but parity is an extreme.

There's a good thread already on the Forex section btw ;)

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Opps, quite right mate. Lets keep the poll going though but please discuss here. http://www.sharetrader.co.nz/showthr...ar-Lows/page12

It might do. Depends on the housing market. The higher the prices go the more the RB will increase the rates and drive the dollar higher. I would be watching the housing market IMHO.

They were clear with their intentions in favouring reigning in housing over exporters.

I think atm they are both moving in separate directions---$K=higher interest rates and relatively good economy---$A--those resources(mainly Iron ore) are going down in demand (mostly China) suicidal to increase interest rates.

whether they reach parity or not--Its time to start looking at good Ozzie shares as they are getting cheaper.

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Originally Posted by skid

I think atm they are both moving in separate directions---$K=higher interest rates and relatively good economy---$A--those resources(mainly Iron ore) are going down in demand (mostly China) suicidal to increase interest rates.

whether they reach parity or not--Its time to start looking at good Ozzie shares as they are getting cheaper.

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It might hit it sometime this year but might be to short lived to our liking. It would be good though to visit our bigger "western island" on a very cheap fare :)

We will rocket ahead.
Our rural based economy is driven by our farmers' turning water to protein,demand of which is driven by the growing Asian wealthy middleclass.
Australian rising unemployment,mining,manufacturing slowing, weak retail demand ,and an over valued property market means Australia faces huge challenges in the foreseeable future.
Looking forward to my even cheaper Aussie holiday.

Yep, if we go above par I might feel obliged to help our neighbours out again and have another holiday there and while there buy one of the last Ford Falcon's.... the XR8 one which is $52,990 there and $69,990 here.
I would be doing this purely for philanthropic reasons to help their economy out. The fact that this final falcon is fitted with a supercharged 5.0 V8 engine making 520 horsepower on over-boost would have absolutely nothing whatsoever to do with it :D

Looking a bit toppy here eh? That's one mega climb in a little over a month:

https://nz.finance.yahoo.com/q/bc?s=NZDAUD=X

Also meed to watch that iron ore rebound and Chinese stimulus:

http://mobile.bloomberg.com/news/201...eculation.html

[QUOTE=BFG;524450]Looking a bit toppy here eh? That's one mega climb in a little over a month:

https://nz.finance.yahoo.com/q/bc?s=NZDAUD=X



Thanks for the link,but I found the interactive chart a lot more interesting,as the NZ$ went through the 200 day ema on 17/11/2014 and the uptrend was confirmed by a Golden Cross on 2/12/2014.

[QUOTE=percy;524454]

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Originally Posted by BFG

Looking a bit toppy here eh? That's one mega climb in a little over a month:

https://nz.finance.yahoo.com/q/bc?s=NZDAUD=X



Thanks for the link,but I found the interactive chart a lot more interesting,as the NZ$ went through the 200 day ema on 17/11/2014 and the uptrend was confirmed by a Golden Cross on 2/12/2014.

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This is my interactive chart and it says everything way overbought and needs a breather after going 110% out the gate!

http://www.bigcharts.com/advchart/fr...false&state=11

[QUOTE=BFG;524456]

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Originally Posted by percy

This is my interactive chart and it says everything way overbought and needs a breather after going 110% out the gate!

http://www.bigcharts.com/advchart/fr...false&state=11

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Thanks for the link.
Not used to bigcharts.Only confused me.!!!!

[QUOTE=percy;524457]

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Originally Posted by BFG

Thanks for the link.
Not used to bigcharts.Only confused me.!!!!

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Have a play around with it, much nicer to use than Yahoo, has 20 minute lag during trading and way more technical options. Can even choose chart scheme/pattern as well :)

Nice fall below 95 cents key support again today on the back of an iron ore price bounce and China stimulus talk. See if it keeps up or whether it's a dead kitty :)

Great time to be buying into ASX stocks, if you're confident in em'. I've just picked up a few more small caps and added to current holdings. SGH and CTD are my top picks for the year!!

I'm happy to wait for parity, pretty sure it'll come...Oil and many of Australia's commodities are in the toilet with no meaningful signs of an early recovery.

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Originally Posted by Roger

I'm happy to wait for parity, pretty sure it'll come...Oil and many of Australia's commodities are in the toilet with no meaningful signs of an early recovery.

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Only things to watch are interest rates and iron ore prices. Oil price has no bearing on forex cross.

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Originally Posted by BFG

Only things to watch are interest rates and iron ore prices. Oil price has no bearing on forex cross.

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Oil and therefore gas ... LNG are going to be a big downer on the Aussie economy , so a lot to do with the x IMO ....

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Originally Posted by stoploss

Oil and therefore gas ... LNG are going to be a big downer on the Aussie economy , so a lot to do with the x IMO ....

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Oil and gas combined make up half the GDP of Aus as Iron Ore does (11% vs 22%) So not negligible, but also not that big.

http://en.m.wikipedia.org/wiki/Econo...rt_Treemap.png

Today we see the first meaningful sign of a divergence in the trend for the main commodities of the respective economies and look at the early jump in the cross rate to 95.95 cents at 8.00 a.m. this morning, up a full cent in one day !! Dairy starting to recover and oil, LNG and the vast majority of other Australian commodities still headed down at pace. Parity is looking increasingly likely IMHO.

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Originally Posted by stoploss

Oil and therefore gas ... LNG are going to be a big downer on the Aussie economy , so a lot to do with the x IMO ....

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Originally Posted by BFG

Oil and gas combined make up half the GDP of Aus as Iron Ore does (11% vs 22%) So not negligible, but also not that big.

http://en.m.wikipedia.org/wiki/Econo...rt_Treemap.png

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I added some charts to BFG referred site Treemap..
You see from the map as BFG observed the big 3 coal iron oil make up half of the Aussis exports...
Currency usually correlates with the terms of trade...so it comes as no surprise that the Aussi $$ is continuing to weaken.
You notice that Aussi exports enjoyed that 2007/2008 bubble....and the 2011 rebound..
As with all bubbles they don't last ..so one makes Hay while the sunshines...Did Australia Inc may Hay??? With hindsight, and with recent poor economical performance it seems the answer is, "no they didn't".

Bubbles are rare events....nice memories but investors must assume that these events are not normal...so one should assume an immediate return to that 2007situation is unlikely....

Iron doesn't seem to be that low chartwise..It could be still be a little higher than its "normal" (long term median)...so one could argue it may not be undervalued ..hence the wish to return to much higher values may be difficult to achieve in the near future.

Gold ditto

Coal bubble was tremendous and the bubble after shock was just as volatile...Again (similar to Iron) looking at the price history on the charts one could argue that the current prices could around its normal (natural) levels or slightly lower.

Oil looks lower than "normal"
So.... if these commodity prices are back near their "normal" levels...One has to ask the question "What on earth (pun:p) has happened to the Structural System of the Australian Economy during these last 20 years?"

And... the future?....Aussi may need another bubble to perform..Reliance on "bubble hope" not a good way for an economy to function...structural reforms needed?

http://i458.photobucket.com/albums/q...ap06012015.png

Very good points there Hoop, cheers

Well they won't be exporting Holden's or Ford's come 2017 so that's another blow to the Aussie economy and a blow to motoring enthusiasts who like cheap high performance rear wheel drive cars.

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Originally Posted by Roger

Well they won't be exporting Holden's or Ford's come 2017 so that's another blow to the Aussie economy and a blow to motoring enthusiasts who like cheap high performance rear wheel drive cars.

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Every vehicle produced was costing the taxpayer thousands. Stopping production is hardly a blow to their economy.

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Originally Posted by fungus pudding

Every vehicle produced was costing the taxpayer thousands. Stopping production is hardly a blow to their economy.

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So the taxpayers won't be paying out the same amount in dole money? And then there is the downstream social costs of unemployment.

Would sort of balance things out with the economy.

0.9641 currently, parity awaits!

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Originally Posted by fungus pudding

Every vehicle produced was costing the taxpayer thousands. Stopping production is hardly a blow to their economy.

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There's so many different ways to creatively measure cost its highly debateable. You think the parent companies of Ford and Holden wanted to show a profit in Australia and pay Australian tax ? Come on... lets not be naïve about multinationals ability to manipulate profits through transfer pricing methodologies. Leaving that debate to one side, one thing for absolute sure is there will be tens of thousands of employees no longer employed by Ford, Holden or the myriad of associated component manufacturers, and all those people won't be spending their respectable sized wages at the local restaurants, bars, clubs e.t.c. so add up the multiplier effect as its affects hundreds of other small business's and retailers already impacted by the serious cutback's in the mining industry and its easy to see why the fundamentals for the Australian economy aren't looking good. What's their forecast deficit again ? $50 Billion ?

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Originally Posted by Roger

There's so many different ways to creatively measure cost its highly debateable. You think the parent companies of Ford and Holden wanted to show a profit in Australia and pay Australian tax ? Come on... lets not be naïve about multinationals ability to manipulate profits through transfer pricing methodologies. Leaving that debate to one side, one thing for absolute sure is there will be tens of thousands of employees no longer employed by Ford, Holden or the myriad of associated component manufacturers, and all those people won't be spending their respectable sized wages at the local restaurants, bars, clubs e.t.c. so add up the multiplier effect as its affects hundreds of other small business's and retailers already impacted by the serious cutback's in the mining industry and its easy to see why the fundamentals for the Australian economy aren't looking good. What's their forecast deficit again ? $50 Billion ?

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If you read the figures published when the closures were announced, it would have been cheaper to shut up shop 5 years ago and for the govt. to give every employee a million dollars. Transfer pricing or not - they wouldn't shut up shop if there was a choice, but even with subsidies etc. it just doesn't stack. Australian labour rates are simply too high. Labour rates have also killed off the bulk of car production in Germany.

Perhaps some anticipation of interest rates being kept on hold into 2016 due to NZ deflationary pressures might make the $ bob about below 1 for the time being.

Could even be that LVR by itself alone may be enough control for the RBNZ for some time to come.

http://www.scoop.co.nz/stories/BU150...g-bnz-says.htm

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Originally Posted by fungus pudding

If you read the figures published when the closures were announced, it would have been cheaper to shut up shop 5 years ago and for the govt. to give every employee a million dollars. Transfer pricing or not - they wouldn't shut up shop if there was a choice, but even with subsidies etc. it just doesn't stack. Australian labour rates are simply too high. Labour rates have also killed off the bulk of car production in Germany.

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Agreed. I think another big issue is the dramatic reduction in volume in the large car sector which now accounts for only 8% of all vehicle sales and declining rapidly. Nobody could have foreseen that five years ago and its always perfect 20/20 vision with hindsight. That and only selling to a niche market in Australian and N.Z. was always going to be a recipe for disaster one day. Unrealistic labour rates are killing all sorts of manufacturing in Australia. What I keep hearing is aussies and their unions demanding that they need to earn XYZ an hour to afford to live in many of the cities in Australia with their sky high real estate and rental prices. Something's gotta give. That said Auckland real estate prices and rents are also now a major issue for a large proportion of young folks.

Mac Yep bound to have some effect except for the fact that we're far from the only economy staring down the barrel of a period of deflation, including Australia and much of Europe.

Well it's more a matter of weighing all the multiple pertinent influences is it not;

http://www.nzherald.co.nz/business/n...ectid=11384323

Anybody want to host a parity party if it does happen???

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Originally Posted by BFG

Anybody want to host a parity party if it does happen???

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I guess not but its looking more and more likely we'll hit par sometime this year.

I think if we are going to it will need to be in the next month or three as I think we will start seeing a deterioration in the NZ economy later in the year coming from the farming sector.

Majority of businesses surveyed expected NZD/AUD parity. Can we keep some hope in 2016 at least?

Next to nil hope IMHO ....more likely to see low 80's than high 90's

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Originally Posted by JBmurc

Next to nil hope IMHO ....more likely to see low 80's than high 90's

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Thank you JBmurc.