Australian dollar to plummet?

[pologti18t]

Bears circle Goldilocks as Aussie is tipped to slide

If it come true it could make it interesting with regards future car prices.

[Buller_Scott]

One can only hope that the aud plummets against the usd. fingers crossed (selfish personal reasons).

[wai]

Isn't it amazing. First we had the economists bleating that the dollar was valued too high. They get their way and it comes down in value. Now they are bleating that it is going to go too low.

Funny how we don't hear bleating from the US that their dollar is going to increase in value.

What a high dollar did was give us the best chance we had of getting some semblance of a manufacturing industry back up and running. What we now have is low labour costs, but not enough value in our dollar to be able to go out and actually equip manufacturing plant.

So we have a low dollar AND we do not have the value in overseas currencies to purchase the tooling to make our manufacturing competitive. The result is a lose:lose outcome. Of course, those willing to speculate on how low it will go will make a killing.

What we need is someone to go on a buying spree for Australian dollars. This could be done really cheaply now. Then when the value goes up because "someone" is buying, offload the dollar and make a handsome profit. This will make the economists have kittens.

But we HAVE to listen to economists. After all, look what they gave us...the Global Financial Crisis. With a gift like that what else could we ever want.

[Tarmac]

Sucks for online shopping. Good for local manufacturing.......unfortunately a lot of local manufacturers are useless. Which is annoying.

[THE_EGG]

Sucks for me as I'm travelling to the US at the end of the year...There goes my plans to get cheap stuff.... yes I am thinking selfishly

[ill0gitech]

One can only hope that the aud plummets against the usd. fingers crossed (selfish personal reasons).

I work for a US company. 100% with you on this.
Though I will curse it if I have to travel overseas on my own dime

[Finance_Analyst]

If I really knew the answer to this question, I would not be wasting my time on this forum but trading FX futures, making millions and selling my VW for something better

[ill0gitech]

Well at least you would only do it if you knew the answer, as opposed to the other guys who take massive gambles with investor dollars

[Njay]

i think its great if manufacturing picks up, i'm recently graduated chemical engineer and hoping it will open up some more job opportunities

[brad]

What a high dollar did was give us the best chance we had of getting some semblance of a manufacturing industry back up and running. What we now have is low labour costs, but not enough value in our dollar to be able to go out and actually equip manufacturing plant.

.

I'm not sure how you work that out. High dollar makes imports cheaper. Given the ease & speed of transferring information between countries it is cheaper to get stuff fabricated overseas than make it here.

A stair / railing / balustrade business I used to sub-contract for in 2007 had ~60 employees plus contract workers plus an Australian manufacturing / fabrication facility. A few years back he got rid of the tradies/fabricators/machinery & factory, bought a warehouse/office & retained his sales team, check-measurers, draughtsmen, installers & warehouse personnel. He sends all the drawings overseas & gets it fabbed over there.

Sure a low dollar will bump up the capital spend but that's long term investment & not operating cost

[wai]

i think its great if manufacturing picks up, i'm recently graduated chemical engineer and hoping it will open up some more job opportunities

Sadly, what is considered manufacturing in Australia is having a company where everything is done in China. We had the opportunity to set ourselves up with out high dollar, only we wanted it to come down in value. As they say, "Be careful what you wish for. It might just come true". Our wish was for a dollar lower in value.

[wai]

I'm not sure how you work that out. High dollar makes imports cheaper. Given the ease & speed of transferring information between countries it is cheaper to get stuff fabricated overseas than make it here.

It also makes it cheaper to buy machine tools to manufacture. Remember, with automated manufacturing, it does not matter where you manufacture as the labour cost ends up being just a small part of it.

A stair / railing / balustrade business I used to sub-contract for in 2007 had ~60 employees plus contract workers plus an Australian manufacturing / fabrication facility. A few years back he got rid of the tradies/fabricators/machinery & factory, bought a warehouse/office & retained his sales team, check-measurers, draughtsmen, installers & warehouse personnel. He sends all the drawings overseas & gets it fabbed over there.

Sure a low dollar will bump up the capital spend but that's long term investment & not operating cost

Work was being sent over to China long before the dollar went up in value. I did the manufacturing drawings for a company making crusher wear liners (some 400 over 10 years). They had to look elsewhere because there were not the foundries to cast in sufficient batch sizes. Foundries were not getting work here because of a refusal to update equipment. As a result work went to China. The few smaller foundries closed.

I prepared manufacturing drawings for truck brake drums. The company here could not get workshops to turn the work out quickly enough. Most do not realise how frequently truck brake drums need replacing. He went to China because no workshop was capable of capable of producing them in sufficient quantities because of antiquated manual machine tools.

Companies here simply did not see the value in updating equipment. Even now, little of the major engineering drafting gets done locally. I was asked to prepare fabrication detail drawings for a large portal frame building involving a lattice portal beam (140 tonnes). The price was right, the overall manhours was right, only they wanted it done in weeks not months, and the only place to get the required numbers was in China. Even if all those doing the work in Sydney banded together, it would still have taken too long.

People leave the industry and it makes things that little more difficult.

It needs some incentive to kick start it, only the price coming in from China is way under what anyone here can match. In drafting, it costs around $8,000 for a single AutoCAD seat with specialist packages costing from $20,000 per seat plus an annual subscription. China does not understand software licences and this is why they can offer the rates they do. We are being asked to match rates of between $3 to $10 per hour. At those rates, see how long it takes you to pay for the purchase of an initial licence and then how long it takes to pay for the annual fee. Then look at the cost such as utilities, telephone, Internet, etc, then wages, hardware and other software, and maybe a tiny profit and see how far those rates go. These rates had little to do with the exchange rate. We paid $8,000 per licence for AutoCAD when our dollar was USD0.60, and we are paid exactly the same price when it was USD1.05. All this despite the US price being USD $3,000 per licence.

But we are digressing now.