Currency exchange rates: an infallible predictor!
I was chatting with a store owner named Lucy last week, and she said that if she had some spare money now she would buy U.S. dollars and Australian dollars. The reason is that her two children are about to start their post-graduate studies at Columbia University and the University of Queensland, respectively. Previously, in fact since 1997, she has been watching the currency exchange rates, while her daughter studied in the U.S. and her son in London. Compared to the Singapore dollar, which she must use to pay for their educations, the currencies in the countries where her kids were rose by 28% – 34% (she had the dollar exchange figures, but I’ve done the percentages for you), which means that the money her family used for education was one-third more than they had budgeted. But the kids have to study abroad at well-reputed universities if they hope to earn a good living in Singapore, so the investment is necessary. Naturally the foreign currencies lost value once her children had finished studying abroad.
Right now the Sing dollar is down against the US dollar, coinciding with Lucy’s son’s arrival in New York in September. With the immanent departure of her daughter to Australia, Lucy anticipates more pain. Her daughter will arrive in Brisbane January 12, so buy up those Aussie dollars now! Lucy is willing to guarantee you a 28% return within 18 months.
December 9th, 2008 at 5:58 am
OK, just to test this, I’m going to post the currency rates as of today, December 9. Rates are determined by Yahoo.
1 Sing dollar = US$.6655, = .5316 Euros, = 1.011 Australian $, = NZ$1.2156
Let’s see if I remember to check back in late January!
December 27th, 2008 at 8:49 pm
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February 12th, 2009 at 9:07 pm
OK, it’s February 12. Again, according to Yahoo,
1 Sing dollar = US$.6619, = .5159 Euros, = 1.0226 Australian $, = 1.2766 NZ$
Actually, it’s risen slightly against Australia and New Zealand dollars, fallen slightly against the US$, and dropped a little more significantly against the Euro. So far Lucy’s fears are unjustified. But let’s see what happens after the US Stimulus Bill and more bank bailouts.
March 16th, 2009 at 4:30 pm
OK, looks like Lucy’s prediction is beginning to play out. It’s March 16, 2008. Here’s Yahoo’s rates: A Singapore dollar is worth 65.19 cents US., and worth 98.64 Australian cents. That’s not so bad, you say. Ah, but according to other sources the Sing dollar is falling. We sent some money to our US bank account two months ago, and the exchange rate was 67 US cents per Sing dollar. We did the same last week, and it was 62.3 cents. That’s pretty nasty. Let’s hope it bounces back, just as we hope everything bounces back – except for AIG, of course, who probably should die a horrible death.
April 17th, 2009 at 2:38 pm
Today’s April 17. On Yahoo, the Sing dollar is worth 66.67 US cents, and 92.54 Australian cents. Lucy’s worries so far are groundless. Now if her kids were in London spending Euros she might be in more trouble. Are we waiting for the othe rshoe to drop?
August 18th, 2009 at 1:45 pm
Today is August 18. The Sing dollar is worth US$.689, AUS$.8635, courtesy of Yahoo. Lucy’s out of luck in Australia, down about 15%. Still plenty of time before the 18 month deadline, though!
November 12th, 2009 at 2:22 pm
Today is November 12. The Sing dollar is worth $.72 US, $.77 Australian, and .4086 Euros. So up about 8% against the USD, down against the Euro, and down 23% against the Australian dollar. So far Lucy’s son at Columbia in NYC is costing her less than her daughter in Sydney, but she’s still taking a bath in the currency markets. She was right…. and at $.97 NZ, she just can’t win in Aotearoa either. Fortunately, she’s only got the two kids.