Tuesday, April 11, 2006

Currency and exchange rates problems

Recently, New Zealand Dollar value has dropped in the currency market. The drop is quite big and I, as a New Zealand resident, really feel the effects of this situation. If your country’s currency exchange rate has also dropped, you should read this post.

How does it affect me?

Well, changes in exchange rates usually will affects big player in the economy like government, firms etc. But, a small resident like me also can feel the heat. This is because, as the currency goes down, imported goods’ and services’ price will go up. So, I have to postpone my plan to buy a Jack Purcell shoes for now as the price has gone up (which I quite regret as I do not purchase it earlier).

I also have to cancel my vacation plan to go to Australia. This is because Australian Dollar is still strong and I have to pay more to get 1 Aussie Dollar. This evening, a friend of mine has done a currency exchange for Aussie Dollar. Guess what? He only get about AUD260 for NZD300. That is huge! Before, we can get like AUD280 or AUD290 for the same NZ Dollar amount.

Who are the people behind these things?

Personally, I would say the sellers are the people who put the high prices. But, they are not the people who we should blame. This is because they just want to secure their place in the market as the cost of production goes up. So, any price changes in the cost will be passed to the consumers which are all of us. (I learned this from my economic lecturer)

What we should do?

All I can say is just try to save money as much as you can. This is because, you will find that you are in great loss if you spend your money now. Try to find high interest saving account. The one that I recommend you is online saving account which I have discussed before.

And remember, do not go on vacation to other countries that are not in low exchange rates (for Kiwis, Aussie is the closest example). Try to find somewhere else like Malaysia. I am not trying to promote Malaysia, but that is the fact. You can have more purchasing power if you go to the lower currency country. If you are from US, you can get about RM3.60 (RM is Ringgit Malaysia) which you can buy a complete set of lunch.

What am I looking for?

After doing some analysis on the exchange rates and reading some articles on the net, I found that FOREX trading is a good way to manipulate this situation. FOREX trading stands for foreign exchange trading. But, the problem is, it is hard to find a free courses on how to do FOREX trading. So, I still work hard to find one. I really want to learn on how to do this as I heard that we can make quite a big amount of money if we get the things right.

Any suggestions, ideas or comments from people out there on FOREX trading?

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