Yuan 15% Devaluation?

Discussion in 'Currencies' started by JulieW, Jan 8, 2016.

  1. JulieW

    JulieW Well-Known Member Silver Stacker

    Joined:
    Oct 14, 2010
    Messages:
    13,064
    Likes Received:
    3,292
    Trophy Points:
    113
    Location:
    Australia
     
  2. willrocks

    willrocks Well-Known Member Silver Stacker

    Joined:
    May 10, 2012
    Messages:
    7,777
    Likes Received:
    7,199
    Trophy Points:
    113
    Can we expect the AUD to drop 15% if this happens?
     
  3. JulieW

    JulieW Well-Known Member Silver Stacker

    Joined:
    Oct 14, 2010
    Messages:
    13,064
    Likes Received:
    3,292
    Trophy Points:
    113
    Location:
    Australia
    I'd expect to somewhere around 65c
     
  4. Miloman

    Miloman Active Member Silver Stacker

    Joined:
    Feb 21, 2013
    Messages:
    1,467
    Likes Received:
    1
    Trophy Points:
    38
    Location:
    Sydney, Australia
    I was listening to someone a good deal smarter than me.

    He said that the flight of capital out of China would increase and although Aussie property is admittedly overvalued he expected the Chinese capital to continue to enter the property market over here.

    Although I don't agree with him as I think Aussie property has to fall far further, however this would likely keep the bubble from popping suddenly, it was interesting his view.
     
  5. JulieW

    JulieW Well-Known Member Silver Stacker

    Joined:
    Oct 14, 2010
    Messages:
    13,064
    Likes Received:
    3,292
    Trophy Points:
    113
    Location:
    Australia
    I think a lot of people are underestimating the advantages to Australia of the cheap dollar, and no doubt it's why the RBA have been pushing the dollar down, or trying to, for a few years now.

    I was thinking about this today in a restaurant filled with 20 and 30 somethings all spending and earning with gusto. The talk was all of travel and new cars etc, just the thought of mentality that Yellen would love to see.

    The "richest country in the world" with an exchange rate that gives you access to cheap houses will no doubt be popular. Do you want residency with that?
     
  6. James

    James Member

    Joined:
    Dec 24, 2013
    Messages:
    139
    Likes Received:
    3
    Trophy Points:
    18
    Location:
    Perth
    I see that large and powerful interests like the Aussie property prices supported. Governments depend on property taxes (property price dependent) and bank share prices depend on mortgage values (property price dependent). History appears to show the Reserve Bank taking notice of these kinds of pressures - so I expect a bias to weakening the Aussie dollar to maintain the overseas appeal of Aussie property. However, in other ways, Joe average suffers from weak currency - notably due to rising prices of imports.
     
  7. Miloman

    Miloman Active Member Silver Stacker

    Joined:
    Feb 21, 2013
    Messages:
    1,467
    Likes Received:
    1
    Trophy Points:
    38
    Location:
    Sydney, Australia
    Yeah, the underlying theme is "population growth" and it's from overseas.

    As you know if they invest enough, they get free residency. Most are not really migrants anyway, I think normal "migration" changed a long time ago and the diaspora are far more mobile. Integration is a thing of the past as there no longer is a majority of any ethnicity.

    Everything is being managed really, there are multiple agendas running simultaneously, ingenious really.
     
  8. billybob888

    billybob888 Well-Known Member Silver Stacker

    Joined:
    Jan 8, 2014
    Messages:
    1,662
    Likes Received:
    108
    Trophy Points:
    63
    Location:
    Australia
    Even if the yuan drops by 15% against the USD, it has still outperform most of other currencies over the last couple of years such as our own
     

Share This Page