Jan 21, 2015
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As the AUD threatens to drop even lower and is forecasted to sit at around ~57 cents compared to the USD for a couple years, I am wondering what is going to happen long term. Obviously, at the start, this a good thing for anyone that has savings in USD to be able to put towards going to school in Australia. Just watching the drop happen over the past few months has made my budget spreadsheet push out more and more savings. However, I am wondering what happens to the prices of things as this lower rate stays around. Will tuition prices rise (more so than normal) or rent prices? Anyone have any insight on this?
 

jp123ok

Dermatopathologist
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Sep 21, 2007
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I expect that the price of many imported goods will rise in response to the decline in the exchange rate but I doubt that rent or tuition will be significantly affected. By the way, it is really unlikely that the AUD will drop to 57 US cents.
 
OP
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Jan 21, 2015
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Medical Student (Accepted)
I expect that the price of many imported goods will rise in response to the decline in the exchange rate but I doubt that rent or tuition will be significantly affected. By the way, it is really unlikely that the AUD will drop to 57 US cents.
Well, from my reading, that isn't really true. It may not get to that much of a low, but it will definitely get closer to 57 US cents than it is now.

http://www.businessinsider.com.au/morgan-stanley-reasons-to-sell-the-australian-dollar-are-mounting-2015-9
http://www.smh.com.au/business/markets/australian-dollar-forecast-to-hit-us60-cents-20150902-gjds14.html
http://longforecast.com/fx/australian-dollar-forecast-for-2015-2016-and-2017.html
 

bashwell

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Mar 20, 2013
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Good news if you borrow in US dollars to pay Aussie tuition (and then expect to head back to the US to pay back your loans), I suppose.
 

jp123ok

Dermatopathologist
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Sep 21, 2007
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I agree that the Australian dollar is heading lower, provided either that interest rates rise in the US or fall in Australia, but I don't think anyone can confidently predict where it will end up. You may recall predictions from around 2012-13 that the Australian dollar was heading towards 2 US dollars... These sorts of predictions are notoriously inaccurate and should be interpreted with caution.
 
Last edited:
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Jan 21, 2015
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Medical Student (Accepted)
I agree that the Australian dollar is heading lower, provided either that interest rates rise in the US or fall in Australia, but I don't think anyone can confidently predict where it will end up. You may recall predictions from around 2012-13 that the Australian dollar was heading towards 2 US dollars... These sorts of predictions are notoriously inaccurate and should be interpreted with caution.
I agree with you that they are not accurate predictions. However, they are educated predictions and show some indication on the direction of the dollar. As such, we both agree the dollar is heading lower. That is all I was establishing to ask how much that trickles down throughout the economy of a country. If prices of everything end up rising after all is said and done, then it ends up being a wash.