Foriegn Curreny Account

[petercallen]

If your not an oz citizen I would be very wary of AUD at these levels.. Any china slowdown (and thats not that unlikely) will whack the commodity currencies (AUD / CAD / Etc) hard.. They have had a good run based on the interest rate differentials but as a speculative play at these levels ?? Thats not a low risk play IMO.

Of course if your australian, or have connections to Oz holding a home currency account is different, but pure speculative, the best of that trade has passed would be my guess. More interesting personally is to look at the GBP / AUD spread to close.

EDIT :: Also to check is will a Thai bank give the nice Oz interest rates ?? The whole point of having AUD is to pick up on the 5 - 6% return, do the local banks give those nice rates ??

I am an Australian citizen as most people know by reading my posts

In the last recession Australia is one of the few country's that did not go into recession

All funds in Australian bank accounts are guaranteed by the Australian government

No Australian banks went under.

If China slows down because the recession double dips i would worry about your home currency not the AUD.

I will be bringing funds to Thailand to purchase a house and i believe a FCA is the best way to do it

Not sure i would bring funds to LOS planning to buy a house. Many sellers, including me, would prefere to be payed in foreign currency outside LOS

keep a few hundred K baht here for a rapid downpayment, and then transfer according to entered agreement.

Thai banks are in general healthy. During Taksin time, all deposits had "unlimited" government protection. Later this protection has been limited, but of course not made public. Several countries in the west have reduced this government protection to 3 mill baht, some got really hurt when Islands banks whent belly up.

Yes i know that mate, I will only be opening a FCA with the minimum amount so if i need to i can transfer money into it

I am keeping my options open, i will be able to pay in a foreign currency outside of LOS if it suites me.

[LivinLOS]

Good time to step out of AUD then.. Been a nice ride up on the back of the china play, coupled with the carry trade and high yielding deposit accounts.

For someone who knows so much about banking your answer makes no sense.

AUD is a commodity currency, China booming has been buying up huge amounts of commodities.. I turn providing AUD strength..

Secondly AUD is a high yielding currency (what is it now 5 or 6 % ??) and another cycle has been the carry trade, borrowing in Yen (and now USD) at zero and investing that in AUD to catch the yield.. That inward investment has also boosted AUD.

Obvious no ??

[petercallen]

Good time to step out of AUD then.. Been a nice ride up on the back of the china play, coupled with the carry trade and high yielding deposit accounts.

For someone who knows so much about banking your answer makes no sense.

AUD is a commodity currency, China booming has been buying up huge amounts of commodities.. I turn providing AUD strength..

Secondly AUD is a high yielding currency (what is it now 5 or 6 % ??) and another cycle has been the carry trade, borrowing in Yen (and now USD) at zero and investing that in AUD to catch the yield.. That inward investment has also boosted AUD.

Obvious no ??

It seems we agree to disagree, you have your opinion and i have mine.

The only time i have lost money is listening to so called financial advisers

[LivinLOS]

Those are not 'my opinions'.. Its market facts and generally accepted consensus (group opinion I agree).

http://en.wikipedia.org/wiki/Commodity_currency

commodity currencies generally refer to the Australian Dollar, Canadian Dollar, New Zealand Dollar, and the South African Rand.

http://www.investopedia.com/articles/forex/06/CommodityCurrencies.asp

More specifically, since economic growth and exports are directly related to a country's domestic industry, it is natural for some currencies to be heavily correlated with commodity prices. The top three currencies that have the tightest correlations with commodities are the Australian dollar, the Canadian dollar and the New Zealand dollar.

http://www.etftrends.com/2010/09/commodity-currency-etfs-move/

Carry Trade

http://www.investopedia.com/articles/forex/07/carry_trade.asp

What is the carry trade?

The carry trade is one of the most popular trading strategies in the currency market. Mechanically, putting on a carry trade involves nothing more than buying a high yielding currency and funding it with a low yielding currency, similar to the adage "buy low, sell high."

The most popular carry trades involve buying currency pairs like the Australian dollar/Japanese yen and New Zealand dollar/Japanese yen because the interest rate spreads of these currencies pairs are very high.

What is my opinion is the idea that the carry trade might unwind or commodity consumption (china) will fall.. Tho I am not alone in the idea as outlined

http://wallstreetpit.com/27356-fallout-from-the-crash-carry-trade-and-the-aud

The Case Against the AUD. It observes that the AUD is the most overvalued currency in a developed market, too high by 30%. It is highly dependent on financials and commodities, and commodities may be in a huge bubble echo. The Lucky Country’s real estate may be as much as 50% overvalued. Speculators and carry-traders are betting heavily on the AUD uptrend

http://www.scribd.com/doc/30393111/The-Case-Against-the-AUD

But thats the beauty of free markets, for every buyer there has to be a seller, for every winning trade someone loses equally. Which direction anything will be tomorrow is always the great game. Will be fun to check in some months or year.

[petercallen]

As i have said LiL we agree to disagree only time will tell.

Are you trying to be one of the top posters on the forum again today.

For someone still involved in business you seem to have a lot of free time on your hands.

Have a nice day.

[LivinLOS]

As i have said LiL we agree to disagree only time will tell.

Agree.. Many of my trades lose, just as long as more win than lose.. Thats all I need.

Are you trying to be one of the top posters on the forum again today.

For someone still involved in business you seem to have a lot of free time on your hands.[

Byproduct of having to sit at a screen watching the metals price ticks.. Its slow day so far silvers been in less than a 0.5 % range all morning, no money in that !!

Have a nice day.

You too and good luck with the house hunting, sure seems like a buyers market so you at least have choice.