Forget these laughable AUD targets


The Aussie dollar will fall further. Forget short-term targets. Focus on long-term investing profits.

We had to laugh as we read a Fairfax report that “Australia’s major banks have slashed their forecasts for the dollar, with some tipping it will drop to 98 US cents, triggered by further interest rate cuts and reduced government spending.”

Talk about closing the stable door after the horse has bolted…

True to form, just as they do with savings rates and mortgage rates, the big banks target price for the Aussie dollar looks uncannily similar…

Bank Target Price Target Date
National Australia Bank (ASX: NAB) US$0.98 September ‘12
Westpac (ASX: WBC) US$0.98 September ‘12
Commonwealth Bank (ASX: CBA) US$0.98 June ‘12
ANZ (ASX: ANZ) $US1.04 Current Qtr

Source: Fairfax

You can bet your bottom greenback they’ll be quick to adjust their target prices again should the dollar move significantly up or down from here.

Predicting such movements is a mug’s game. There are so many variables, predicting where the Aussie dollar might be trading in September is virtually impossible.

The Aussie dollar and Aussie property prices are overvalued. But how the reversion to the mean occurs and how to profit from it or avoid losses is a completely different question.

We don’t know when the AUD will fall, but it will fall. And when it does our already strongly performing international investments will receive a substantial boost. If you haven’t considered investing in international shares, we encourage you to take a closer look.

In the meantime, if you’re looking in the market for some high yielding ASX shares, look no further than “Secure Your Future with 3 Rock-Solid Dividend Stocks”. In this free report, we’ve put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

More reading

The Motley Fool‘s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available.  Bruce Jackson has an interest in CBA, WBC, ANZ and NAB. This article contains general investment advice only (under AFSL 400691).

 

 

OUR #1 DIVIDEND PICK FOR 2016...

Forget BHP and Woolworths. This "dirt cheap" company is growing like gangbusters, and trading on a 5.6% dividend yield, FULLY FRANKED (8% gross). With interest rates set to stay at these low levels for years to come, for hungry investors, including SMSFs, this ASX company could be the "holy grail" of dividend plays for 2016.

Enter your email below to discover the name, code and a full investment analysis in our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2016.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.