Australian Dollar

Your right Blacky, its been a long time since we have seen a 7 in front Au$.

I doubt I am going to sell now because I just don't see anything that can give me the returns I am currently making in US. We also now have a fantastic property manager who basically provides similar service we get here in Australia. This in part is why many Australians would not invest in US and I can tell you in the early stages it was a nightmare dealing US property managers.

For those interested here are the gross numbers today, I have posted before, but of course now the Au$ is helping increase cash flow and houses in Atlanta continue to rise.

Here are the current numbers (gross)

Initial capital - $500,000 (cash)
Purchased 8 houses (2011/12) - from ($34,000 to most expensive $50,000)
Approximate value of each house today - $120,000-130,000 US

Current rental returns - $8400 per month
conversion to Au$ today - $10,763

If I sold them all I would expect to bring home $1,000,000+ net, as the Au$ would cover CGT in US which is 15% and agents fees.

But where do I park it?? I just wont get these returns?? Even high yielding shares just wont cut it as I would be looking at 6% yields (fully franked)

Thanks for the nice comments, and good on Karina she is now purchased 21 US properties.:eek:


Cheers
MTR:)
 
Aud/Usd with a 7 at the front of it.

It's been a loooong time since I've seen that.

Blacky

A week after it dropped below 0.8 it is down to 0.765.

Incredible falls. Helped by the RBA decision to cut rates.

Great for those with US exposure.

Blacky
 
Here's the update from Oxforex

Australian Dollar:
The Australian Dollar plunged to near 6 year lows yesterday as the RBA took many investors by surprise in cutting interest rates. The decision sent a shockwave through markets and saw speculators dumping the commodity driven currency prompting a near 2 cent drop in a matter of minutes. The Reserve Bank cited below trend domestic growth and an increasing unemployment rate as the primary contributing factors behind its decision suggesting the economy has ample spare capacity to build upon. The reduction in rates in combination with falling energy prices should help spark consumer spending and rejuvenate a declining Terms of Trade balance. Touching intraday lows of 0.7627 the Aussie found support and rebounded throughout the North American session as fears surrounding a Greek debt write down and exit from the Eurozone abated while another Soft U.S data print saw investors rush to cover Euro shorts. With Greenback weakness dominating through to end of trade Tuesday the AUD finds itself again hovering just above 0.78 as attentions now turn to preliminary Non-Farm payroll reports ahead of tomorrow?s retail sales read
 
I'm a bit slow but just had a look at our equity as half is in gbp and nearly half in nzd. Nice increases due to the falling aud. Didn't even realise it was happening, need to get my business brain out!
 
Like I said before it is still stronger than a year ago (against EUR and JPY).
It all depends on your reference currency, I don?t give a crap about the US dollar.
 
I'm a bit slow but just had a look at our equity as half is in gbp and nearly half in nzd. Nice increases due to the falling aud. Didn't even realise it was happening, need to get my business brain out!

Good one.
Its hovering around 77, waiting for Au$ to break 75.
 
Good one.
Its hovering around 77, waiting for Au$ to break 75.

When it breaks .77 you will see .75 pretty shortly there after. There is no support.

I watched the GBP yesterday move to 1.9995. It refused to break the magic 1:2mark. Though once it does break through I think it will keep going for a bit. Its eased back a bit this morning, but Im not selling out just yet. I think we have a bit to go still.

If interest rates fall further, it will be a slippery slide further down. Im holding on for the ride.

Blacky
 
OK, so another interest rate drop will weaken the Au$, target has been set for 75 for 2015, I expect we will see this happen this year, RBA will make it happen.:)
 
Yeah, some data came out today indicated private business capex fell by 2.2% in the december quarter. Largely driven by a decline in mining business, however, there was a general downward trend. It makes it the 8th consecutive quarter of reduced business capex

The forecast is for a 15-16% reduction in business capex for the 2015/16 years.

Though in saying this - this report is notorious for how far off the mark it usually is. :p

Anyway - Im hanging my hat on a rate cut by April - and maybe as early as March. May at the very latest.

This will drop the AUD to 75c or below and will push the dollar to half of the GBP.

Blacky
 
Aussie dollar has bottomed according to Kouk.

http://www.smh.com.au/business/markets/currencies/get-in-early-stephen-koukoulas-calls-bottom-on-australian-dollar-20150219-13iv1x.html

One of the few economists to get the February rate cut by the Reserve Bank right has changed tack, calling an earlier end to the central bank's easing cycle and saying the Australian dollar may have bottomed.

In a post on his blog, Market Economics' Stephen Koukoulas suggested "getting in early" as the RBA was likely to stop cutting rates at 2 per cent, leading to a higher Aussie dollar. Market are still betting on two more rate cuts this year to bring the cash rate down to 1.75 per cent.

Mr Koukoulas backed out on his previous prediction of the cash rate sinking to 1.5 per cent. "It now seems the conditions underpinning the gloomy forecast for the cash rate falling to 1.5 per cent by end 2015 are fading," he said.

===

Contrary to the prevailing market view, Mr Koukoulas also reckoned the Aussie dollar may have bottomed out and is on track to recovery to end above US80? by the end of the year.

"It is always, always, always difficult to pick bottoms in currency markets, but that is what I am trying to position for with the Australian dollar," Mr Koukoulas said.

"It is now time to think about getting cautiously long, and anticipate some greater risk of a return to US80? and even US85? than a scenario of a sustained break towards US75?. Trades that profit from the Australian dollar ending 2015 at US82.50? and higher seem to be risks worth taking."

Most currency analysts expect the Aussie dollar to drift lower throughout the year, with HSBC calling US72? by the 2015 year end and NAB forecasting US74?.

===

Mr Koukoulas was one of a handful of economists who got it right on the RBA's February cash rate cut, alongside Westpac's Bill Evans, Deutsche Bank and Goldman Sachs. He was predicting the rate cut from mid last year when most of his peers were still expecting rate hikes in 2015.
 
Good stuff MTR. Just one point though, you will be liable for Australian CGT if you sell those US assets, as an Australian tax resident. So yeah, more of a reason to hold on perhaps.
 
Good stuff MTR. Just one point though, you will be liable for Australian CGT if you sell those US assets, as an Australian tax resident. So yeah, more of a reason to hold on perhaps.

not necessarily Erko - the assets as I understand are owned by a US company (LLP). Therefore depending on the structure the income could be transferred back to Aus in a variety of ways (dividends, income etc). Thus specific taxation advice would manage the tax payable effectively.

Blacky
 
not necessarily Erko - the assets as I understand are owned by a US company (LLP). Therefore depending on the structure the income could be transferred back to Aus in a variety of ways (dividends, income etc). Thus specific taxation advice would manage the tax payable effectively.

Blacky

Fair call Blacky :)
 
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