Business conditions and business confidence dropped off in November, continuing their negative downward trend over the last few months.

Falling house prices and slowing wage growth have been cited as to why the business and the economic conditions down under are slowing. This will not help the Australian dollar as the prospect for an interest rate in 2019 is likely to be put on hold.

Currency Pair% Change in 1 monthDifference on £200,000
GBPAUD4.82%$16,600

Tomorrow we have another important data release – inflation, followed by the Reserve Bank of Australia’s bulletin which will provide an insight into the currenct state of the economic environment. Given the downward trend at the present, if this data follows suit I’d expect the AUD’s value to worsen as we close the week out.

AUD Gains on Hopes for US China Trade Deal

Trade Wars and Brexit – Is there light at the end of the tunnel?

The main talking points on either side of the currency remain Brexit and US-China relations, which seem to be overshadowing an economic data releases at present.

Yesterday it was announced that China are reportedly close to cutting tariffs on US car imports, in the first move in a de-escalation of the trade war. If this does occur, then I would expect risk averse currencies such as the Australian dollar to strengthen. Meanwhile in the UK, the political landscape is in the balance with no real insight as to how Brexit is to play out, and this is keeping GBP under pressure.

 

In my opinion, if the tensions between the US and China do start to ease then we could see the AUD advance, especially against the already strained GBP in the up and coming weeks. I would stress that with so many factors influencing currency at present, it is well worth speaking to us to make sure you are up to date with the latest events.

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