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View Poll Results: Kiwi / Aussie exchange rate where too from here in 2015 ?

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  • 95-96 cents is as good as its gets and it'll head back down a bit in 2015

    19 37.25%
  • It'll probably stay around current level's

    4 7.84%
  • We'll hit parity some time in 2015

    14 27.45%
  • The Kiwi will be worth more than the aussie at some stage in 2015

    14 27.45%
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  1. #21
    ShareTrader Legend Beagle's Avatar
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    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.
    Last edited by Beagle; 07-01-2015 at 09:37 AM.

  2. #22
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    Quote Originally Posted by stoploss View Post
    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 ....
    Quote Originally Posted by BFG View Post
    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
    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) 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?

    Last edited by Hoop; 07-01-2015 at 01:35 PM.

  3. #23
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    Very good points there Hoop, cheers

  4. #24
    ShareTrader Legend Beagle's Avatar
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    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.

  5. #25
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    Quote Originally Posted by Roger View Post
    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.
    Every vehicle produced was costing the taxpayer thousands. Stopping production is hardly a blow to their economy.

  6. #26
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    Quote Originally Posted by fungus pudding View Post
    Every vehicle produced was costing the taxpayer thousands. Stopping production is hardly a blow to their economy.
    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.
    Last edited by 777; 07-01-2015 at 05:36 PM.

  7. #27
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    0.9641 currently, parity awaits!

  8. #28
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by fungus pudding View Post
    Every vehicle produced was costing the taxpayer thousands. Stopping production is hardly a blow to their economy.
    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 na´ve 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 ?
    Last edited by Beagle; 08-01-2015 at 05:59 PM.

  9. #29
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    Quote Originally Posted by Roger View Post
    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 na´ve 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 ?

    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.

  10. #30
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    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

  11. #31
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by fungus pudding View Post
    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.
    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.
    Last edited by Beagle; 09-01-2015 at 07:39 PM.

  12. #32
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    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

  13. #33
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    Anybody want to host a parity party if it does happen???

  14. #34
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by BFG View Post
    Anybody want to host a parity party if it does happen???
    I guess not but its looking more and more likely we'll hit par sometime this year.

  15. #35
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    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.
    Hopefully you find my posts helpful, but in no way should they be construed as advice. Make your own decision.

  16. #36
    Senior Member Valuegrowth's Avatar
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    Majority of businesses surveyed expected NZD/AUD parity. Can we keep some hope in 2016 at least?

  17. #37
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    Next to nil hope IMHO ....more likely to see low 80's than high 90's
    People don't have ideas, ideas have people

  18. #38
    Senior Member Valuegrowth's Avatar
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    Quote Originally Posted by JBmurc View Post
    Next to nil hope IMHO ....more likely to see low 80's than high 90's
    Thank you JBmurc.

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