Next week sees a number of key economic releases for the Aussie Dollar, although inflation remains low for the economy.
The Australian dollar has seen a boost in its fortunes following a more dovish stance from the US Fed decision on Wednesday. The US Fed although keen to raise interest rates has not convinced the markets that the next hike will be in September. The Aussie has seen a small boost as funds return to Australia where interest rates are higher.
Next week has plenty of Australian economic releases which should make for a volatile dollar. Tuesday is jam packed with Australian building permits, trade balance data for June and most importantly the Reserve Bank of Australia interest rate decision.
Australian interest rates are currently sitting at 1.75% although there has been growing pressure on the central bank to cut rates again. It is supposed to be a very close call next week as to whether they cut or not. Australian inflation numbers released earlier this week arrived marginally stronger than expected which may take the pressure off the central bank to act next week. Quarterly inflation was 0.4% which although is a low figure, it is considerably higher than the -0.2% recorded in the previous quarter.
A cut is very much on the horizon - Whether it happens next week or not is less clear and which should keep the pressure on the dollar going forward. There could be some sizeable movement on the back of it when it does happen. The last time the Reserve Bank of Australia cut rates in May saw GBP AUD rally more than 10 cents for this pair taking levels back over 2.00 dollars. Anyone looking to sell Australian dollars may be wise to take advantage of the current opportunities before such a decision is made as the movement last time was more than considerable.
For more information on how next weeks economic releases could impact your Aussie Dollar requirements, call our trading floor on 01494 725 353 and talk to one of our brokers.
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