Its been a few weeks already, and the global economy is still at a meltdown. So much ‘water’ still being vaporised from the market. Local businesses are also suffering greatly from this economic downfall. Working in a shopping centre makes it even more obvious as retail businesses are hit the hardest. Sales are depreciating when usually at this time of the year, people will be layby-ing goods and stocking up in the preparation for Christmas. Its unfortunately for the thousands (millions?) of people who have been directly affected. But those indirectly affected (such as myself) are also at a loss. I look forward to work (sometimes) because I know that the harder I work, the more I get in return. Its harder at work when there’s hardly anyone to SELL the products to!!
The currency is shocking! I was once excited about my dad going back to Hong Kong for business trip because we would ask him to buy stuff for us and stock up on goodies. Something which would have cost me equivalent to $650AUD a couple of months ago in the peak high of Australian currency, will not cost $1050… a $400 difference. Buying here locally wouldn’t even make much of a difference!
Looks like my decision not to travel overseas this year was correct.
For those interested:
OzForex Daily Commentary – 27/10/2008
:: Australian Dollar: The Aussie dollar was savaged by the market on Friday as fear and panic set in on Asian equity markets. The local unit had 4 cents slashed from its opening price of 0.6750 before Europe even opened with offshore markets also selling the AUD down. AUD/USD reached a low below 0.6050 before bouncing somewhat to settle around 62 cents for the majority of the U.S trading session. This morning sees it open lower at 0.6185 against the Greenback, 0.4915 Euro and 57.30 Japanese Yen. With little in the way of local economic news scheduled for release all eyes remain squarely fixed on equity markets and resources.
- We expect a range today in the AUD/USD rate of 0.6030 to 0.6330
:: Great Britain Pound: In what can only be described as meltdown the Pound Sterling capitulated on Friday plunging almost 7% from the Sydney open above 1.6250 against the Greenback to exchange as low as 1.5250 in early Europe. U.K GDP data released on Friday indicates that the economy is all but one step away from recession as economic growth during the third quarter came in below expectations to record a meagre rise of 0.3%. GBP bounced back to 1.5935 during U.S trade but peeled away late in the session to finish at 1.5850. With the Aussie dollar also plummeting the cross rate rallied hard, back to 2.5750 after Friday’s low of 2.4050.
- We expect a range today in the GBP/AUD rate of 2.5400 to 2.5800
:: New Zealand Dollar: The Kiwi suffered a similar fate to the Aussie dollar, savaged by the market as the flight to safety continued on Friday. NZD/USD crashed to reach a low of 55 cents in Europe in the aftermath of last weeks 1% RBNZ interest rate cut as global recessionary fears continue to persist. The Kiwi opens this morning on its lows at 55 cents against the Greenback but has strengthened against the Aussie to be exchanging at 0.90.
- We expect a range today in the NZD/USD rate of 0.5435 to 0.5635
:: Majors: The massive unwinding of long Euro positions escalated during Friday’s offshore trade as it crashed to its lowest level in two years against the Greenback. EUR/USD fell to 1.2490 during London trade on the back of more contraction in both the Manufacturing and Service sectors. Despite continued weakness in U.S house prices sales in existing homes climbed more than expected in September to the highest level in more than a year increasing to an annual rate of 5.18 million, a 5.5% increase from August. Global investors continued to steer clear of riskier assets with equities sold off again on Friday sending USD/JPY on a nosedive below 91. A late squeeze in EUR/JPY back from 113.75 to 120 sees the Euro and Yen open this morning back at 1.2650 and 94.50 respectively against the U.S dolalr with more downward pressure expected in early Sydney exchanges.