Exchange rates

[john carman]

Can anyone explain to a "dumb bum" why the Australian dollar has dropped so much(from 32baht to 23.75) in one year. Is it australia'fault or Thailand? How does the system work?

[Aussieroaming]

Weak Aussie dollar....unfortunately

[Sandman77]

When the tip free trade agreement come between eu and usa , the export of australia will hit hard I see a documentary on german tv

[Cypress Hill]

No one's fault.

Commodities are Australia's biggest earner and China isn't buying as much as they did during the boom.

Australia's economy is growing more slowly as a result which makes its currency less attractive hence the fall in its value against the baht amongst others.

The baht isn't strong; everyone else's currency is weak except the US dollar

Thailand's central bank isn't as keen to cut interest rates to weaken the baht as it is to avoid inflation so don't look for the exchange rate to improve significantly for the AUD any time soon

[Suradit69]

No one's fault.

Commodities are Australia's biggest earner and China isn't buying as much as they did during the boom.

Australia's economy is growing more slowly as a result which makes its currency less attractive hence the fall in its value against the baht amongst others.

The baht isn't strong; everyone else's currency is weak except the US dollar

Thailand's central bank isn't as keen to cut interest rates to weaken the baht as it is to avoid inflation so don't look for the exchange rate to improve significantly for the AUD any time soon

"The baht isn't strong; everyone else's currency is weak except the US dollar"

Well that means the baht is strong compared to those currencies that have fallen. It's a matter of market perception, to some extent interest rates, inflows versus outflows of investment funds, trade surpluses or deficits, only modestly affected by central bank intervention ...

For the time being the dollar is up, though it's not historically high compared to the baht, and the commodity-dependent currencies are down. The Euro is down because of the economic and political mess there. The ruble is down for obvious reasons. So in terms of currency exchange rates, the baht has been stronger than those currencies or those currencies have been weaker than the baht. Aside from trying to avoid nationalistic loss of face, it's the same thing.

You can say I'm taller than you or that you're shorter than me, but it's just semantic variations that amounts to the same thing.

[chiang mai]

delete, wrong thread.

Edited July 12, 2015 by chiang mai

[IMA_FARANG]

As other's have said on this topic much of the foreign exchange rate game is based on expectations and suppositions.

Somebody "thinks" that the U.S Dollar is a better bet to own than an Aussie Dollar.

So that person with Baht "prefers" to Buy U.S. dollars because he or she "thinks" they will get a better return on U.S. Dollars than Aussie Dollars.

So because people want to buy U.S. dollars rather than Aussie Dollars the exchange rate for U.S. Dollars rises, and the Aussie Dollar falls.

In truth, it is all "educated guesswork", there are no real experts just self-taught guessers.

But they have money to throw around, so their opinions are listened to by others.

In "foreign exchange rates" calculations the 80% rule is a good guide.

The 80% rule says that 80% of everything is B - - - - - - t.

Edited July 12, 2015 by IMA_FARANG