The Australian dollar had a tough week losing ground as the US dollar rose and concerns over global trade punished the commodity currency. As is so often the case with the Australian dollar it was events globally which drove the currency’s performance and this week ahead seems likely to be similar.
The development of the Meng Wanzhou case, the Huawei official arrested in Canada has the potential to impact the commodity based currency.
The Trade Wars are of a major concern for the Australian Government and the Australian dollar which relies heavily on trade with China. The concerns over the damage the fallout between the US and China is having on Australia saw the Australian dollar struggle last week.
Domestic news this week will see the latest House Price Index information which could be highlighting a fall in house prices. Australian consumers are heavily indebted and this will heap further pressure on the RBA to avoid hiking interest rates in the future, to add further pressure on the currency.
Thursday sees the latest RBA Bulletin and I think a major question to ask now is 'will the RBA raise interest rates in 2019?' All of the signs are pointing to further troubles ahead for the Australian economy as the Trade Wars, a strong US dollar and concerns at home limit the scope for any rate hikes.
The next move for the RBA could well be lower if global trade concerns increase in 2019, the economy might well need a shot in the arm and a decrease in interest rates would see the Australian dollar much weaker, by making it less attractive to hold.
The pound to Australian dollar exchange rate could be in for a very volatile period as the market continues to adjust to the two of the biggest factors driving financial markets, Brexit and the Trade Wars. The pound is in for a busy few sessions as the market tries to weigh up the possible outcomes from the Brexit and the Parliamentary vote.
Last week saw movement of over 5 cents on the pair as the market struggled to price in these two major factors. I expect this to continue with added gusto this week and clients looking to trade the pair should be in close contact with the team to ensure they are up to date with the latest news.
Contacted Jonathan M Watson following his advisory report on the BBC. He was clear, concise and took the time to completely understand my financial & personal position. It was my first time purchasing a chalet abroad and therefore understandably nervous about trusting someone I had never met with so much family money! Jonathan proved to be responsive to all my requests, telephoning immediately upon any query.
Service is always excellent. I have been a client of Jon Watson for many years and always feel that I receive a personal service. I have recommended them to many of my contacts and will continue to do so.
Service from Jonathan Watson was more than 100%, more than a pleasure to do business with, a gentleman of the highest order.
|Currency Pair||% Change in 1 month||Difference on £200,000|