The Aussie Dollar is benefitting from the improvement seen in the Chinese economy as a commodity based currency with close trade ties to China. Some analysts are expecting AUD to improve throughout the year thanks to the upturn in the global economy. Today's AUD market report looks at how the AUD could continue to benefit from external factors such as this, the increase in AUD over the past month is shown in the table below, showin the difference you could have achieved during recent high and low points of trading.
|Currency Pair||% Change||Difference on £200,000|
The Australian Dollar has turned a corner recently, and look no further than the GBP to AUD rate for confirmation of this as the Pound has lost almost 3% in just the past month. To put this into monetary terms, a £200,000 purchase using Aussie Dollars has become over 10,200 AUD’s cheaper. A pick up in the Chinese economy has benefitted the Australian Dollar owing to its close proximity to Australia, and the global economy picking up has also benefited the economy and AUD’s value. The economy down under grew at a surprisingly high 3.1% in the first quarter of this year, and this coupled with the uplift in the global economy has resulted in some analysts predicting a stronger Aussie Dollar as the year goes on.
The chief economist at HSBC for Australia and New Zealand recently commented that the Australian economy is ‘riding a global wave’. He also outlined how the economy is less at risk from global factors such as the trade wars being initiated by Trump, as it’s in the perfect partnership with China.
It’s also worth noting how the Australian economy is becoming more service based, much to the surprise of many who are shocked to discover this sector is more important to Australia than its mining sector. The sector is less depending on external factors such as commodity prices, and this could offer the Aussie Dollar more support in future in my opinion.
The busiest day for AUD exchange rates next week is likely to be Thursday, as in the early hours there will be a number of releases mostly covering the health of the employment sector.
At the same time Chinese Retail Sales will be released and their economic updates usually hold the potential to move markets due to the interconnectedness of the two economies.
With this level of data released outside of hours, it may be planning an automated trade in case of dramatic market movements. Feel free to get in touch if you wish to discuss these trade contracts further.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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