Why Australian Dollar Is So High

Ask any currency expert what is moving the Australian dollar above $US1.07 and they will cite a list of factors ranging from the strength of the Australian economy, the weakness of other currencies, bond yields, risk appetite and our (relatively) high interest rate.
What ultimately drives the price of anything - shares, goods, services or a currency - is supply and demand. The factors above just go to explaining why the dollar is in such strong demand.

The biggest single event that has moved our currency over the past few days is the downgrade by ratings agency Standard & Poor's of US sovereign debt to a negative credit watch.

The effect of this is to decrease the likelihood that the US will increase interest rates - which in turn would push up the value of the US dollar.

This is the fundamental reason the Australian dollar has been so strong over the past six months. In addition, just about every other Western economy has been in a race to devalue their currency in order to stimulate growth. In this respect our robust currency has more to do with the weakness of the others.

Ours is one of the few currencies that is not being overly manipulated by its central bank boosting supply to keep it low. This is another reason foreign exchange dealers around the world like the Australian dollar - it is a currency that is bought and sold freely. (Despite our size the Australian dollar is the fourth most traded currency in the world.)

The US debt re-rating has also moved the global risk settings. When risk assets receive a bigger weighting there is a stronger tendency to buy the Australian dollar.

It's hardly surprising given that the Australian economy is one of the star pupils of the world economic class.

Amid the turmoil in several European economies and the enormous deficits faced by advanced economies, ours stands out as one that is promising a budget surplus and relatively strong growth.

Right now Australia is a haven, with a strong economy, secure government and plenty of sought-after resources in the ground. (The fact that our resource companies are investing billions to bring on more supply is of no apparent concern right now.) This is too medium term for the currency traders to worry about. Currency operates in the short term and moves by the second in response to news factors.

Yesterday, for example, our currency moved up 30 basis points over 10 minutes in response to the announcement of the US production price index, which was ahead of expectations. This lifted the chance of Australian interest rates being raised later this year, putting more upward pressure on the Aussie.

Besides the reasons enumerated above for our currency being so high, there is another factor at play. Right now no one can find much of a reason to sell it. According to one senior bank commodity expert an increasing number of foreign central banks are getting in on the act.

So, what will be the tipping point? The first will be when the US Federal Reserve lifts interest rates. There has been an expectation for a while that this is on the cards but the likelihood of this taking place any time soon is receding.

If the oil price runs too high this could dampen growth. Then there is China - if it sneezes, the Aussie will certainly catch a cold.

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Source: www.smh.com.au/business/a-central-factor-in-the-rise-and-rise-is-why-sell-20110421-1dqlf.html

The Champion and my elder brother !!

Champion of both format 20-20 and 50 over DIRECTOR GENERAL OF POLICE CUP 2011 Baroda, India.

He is my elder brother Rajesh Bhavsar and Police Inspector in Baroda. He managed whole tournament for DIRECTOR GENERAL OF POLICE CUP 2011. His team won the both series 20-20 and One day 50 over matches..My brother is an awesome person, much more than myself !! It's a great proud and lucky to have brother like you !! We love you so much..
With lots of love..
Rashesh & all family members

Experts play down fears of drop in Melbourne house prices

Source:  http://www.smartcompany.com.au/property/20110418-experts-play-down-fears-of-dramatic-drop-in-melbourne-house-prices-but-say-pain-is-coming.html

Experts play down fears of drop in Melbourne house prices

Property experts say Melbourne house prices are likely to fall in 2011, but have questioned new figures from the Real Estate Industry of Victoria showing an ugly 6% fall in median prices in the March quarter.
Louis Christopher of SQM Research, who is predicting most capital cities will see prices fall by at least 5% during 2011, says the REIV figures – which are based on raw price data, unadjusted for factors such as more sales at the high or low end of the market – can be skewed by big price movements in particular suburbs.
"I don't think house prices have fallen that far in a quarter," Christopher says.
"But the drop in Melbourne house prices is clearly on. The asking prices from vendors have not really dropped that much at this stage but sooner or later, vendors will have to lower their price expectations to meet the market."
Michael Yardney, director of Metropole Property Investment Strategists and a blogger on SmartCompany, has also questioned the data and points out that there are big differences in the data provided by other bodies.
For example, the latest data from the RP Data-Rismark Home Value Index showed prices in Melbourne actually increased 2.5% in February 2011, compared to 2010.
"I didn't believe the REIV statistics for the last year when they suggested the median price in Melbourne increased by 20% and I don't believe their stats now."
Yardney says some segments of the Melbourne property market are clearly going to experience big price drops, but like Christopher argues there are no signs that vendors are being forced to accept big discounts.
"There's no sugar coating it – we are at that stage of the property cycle when there are more properties for sale than there are buyers. This means we are in a buyers' market."
"But there are no desperate sellers giving away their properties at 20, 30 or 40% less than last year."
While Christopher has predicted falls of 5% across most capital cities – including Melbourne – he does have some concerns falls could be greater than this.
For example, in Melbourne he says there is more stock on the market in Melbourne than in the second half of 2008, when prices fell 5% in six months as the GFC hit some home owners.
"It is, right now, oversupplied with current listings. And if that continues we will see further falls."
In addition, the home lending figures suggest that demand is now lower than in the midst of the GFC in the second half of 2008, suggesting prices across the country will be under pressure.
Auction clearance rates remain less than impressive around the country.
In Sydney, figures from Australian Property Monitors show 291 properties were sold under the hammer at a clearance rate of 55%.
In Adelaide, 25 properties were sold at auction for a clearance rate of 45%, while in Melbourne 445 properties were sold at auction for a clearance rate of 62%.
However, the REIV said this was sharply down on the 83% clearance rate seen at the same time last year.

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Some wise words from some smart CEOs

Source: http://www.smartcompany.com.au/high-heeled-success/20100914-some-wise-words-form-some-smart-ceos.html

• To succeed we need to out educate and out engage our customers.
• Make sure you have the hard and soft foundations right in your business.
• Know your numbers.
• Find people in your business doing good things and acknowledge them.
• Listen, speak last and ask the right questions.
• Be a servant leader, lead from behind.
• Embrace change.
• Have fun (pleased to hear this!).
• Focus on profitability (I also recently heard this expression – Revenue is vanity, profit is sanity and cash is king!).
• Understand the value of your brand.
• Everyone in your business sells.
• Keep asking why, why, why?
• Elephants dance with elephants – who will you dance with?
• Raise the roof and create world standards.
• Build relationships.
• Marketing is God.
• What is the perception you want to own?
• What culture do you need to communicate your brand?
• Finally, how will you measure your success?

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New Home Loan Trap

Forty may be the new 30 but when it comes to getting a home loan, lenders will look at you as if you’re 65. Under responsible lending guidelines in the new National Consumer Credit Protection Act (NCCP), lenders will have to verify a customer’s financial situation, assess their capacity to repay without substantial hardship, and not offer credit products that are unsuitable.
While there’s nothing new about lenders checking a borrower’s income, expenses, employment, assets and liabilities, it’s the “without substantial hardship” part that’s hurting. If you’re already 40 and you can’t prove to your lender how you intend to repay a 30-year term mortgage, your lender will say no.
Offering to sell your home as an exit strategy isn’t good enough – the code presumes this "loan will cause substantial hardship and is therefore not a suitable loan". Lenders will want to know what other income streams you have to help meet your repayments if you hit retirement and still have a home loan.
Source: http://finance.ninemsn.com.au/article.aspx?id=8228067