Australian Dollar nearing parity with Singapore Dollar

After Reserve Bank of Australia (RBA) announced cut in benchmark interest rate by 25 basis points to 2.25% today, the Australian dollar declined sharply to 1.036 against Singapore dollar. (AUD$1 = S$1.036 at 2.00 pm). See chart below.IMG_2467

Australian dollar was on a downtrend since two years ago. See graph below.IMG_2466

Australian dollar was at its highest at S$1.305 on 11 April 2013. Between then and now, Australian dollar lost 20.6%. See table below.

 

Date AUD/SGD Change %
28 Sep 2012 1.280 NA
11 Apr 2013 1.305 +1.9
27 Jan 2014 1.112 -14.7
8 Sep 2014 1.174 +5.5
19 Sep 2014 1.139 -2.9
26 Sep 2014 1.118 -1.8
3 Feb 2015 1.036 -7.3

Source: Yahoo!

On 20 May 2013, I took delivery of A$ at exchange rate of S$1.275. The most recent rate was S$1.036. That was a decline of 18.7%. Based on yesterday’s AUD/SGD rate, my Aussie FD was down 16.2%. This was after Australian interest income was added to the investment. This is the risk of investing in foreign currencies.

Copyright © 2015, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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