The AUD has been struggling against a number of currencies as commodity prices have fallen and interest rates staying on hold. It has however done fairly well against the Pound as first quarter GDP figures came out at 3.1%. The market report below discusses the factos that impact a commodity based currency such as the Australian Dollar. The table below shows the difference in AUD you could have achieved when buying £200,000.00 during the high and low points of the past 30 days.
|Currency Pair||% Change||Difference on £200,000|
The Australian economy has been performing very well for many years now and last week Australian GDP data came out 3.1% during the first quarter and this has kept the Australian Dollar relatively strong vs the Pound.
However, against a number of different currencies the Australian Dollar has struggled as commodity prices have been falling combined with interest rates due to be kept on hold for the foreseeable future. Iron ore and coal prices have been falling and this has caused the demand for the Australian Dollar to fall recently.
The Reserve Bank of Australia has recently kept rates on hold for the 22nd time in a row and with the US Federal Reserve set to continue their path of raising rates then I expect the Australian Dollar to weaken as global investors will seek to move money into the US Dollar and away from the Australian Dollar.
US President Donald Trump has introduced tariffs on steel and aluminium imports recently and to me it is only a matter of time before this causes a problem for Australia and therefore the Aussie Dollar. In the short term the Australian Dollar has remained relatively strong against the Pound but to me this is because of the on going Brexit uncertainty. On Wednesday Westpac will release their latest Consumer Confidence survey and this has been falling since the turn of the year and with predictions for-0.6% I think depending what happens with the EU withdrawal bill this week the Pound could possibly make some gains vs the Australian Dollar towards the end of the week.
On Thursday the latest set of Unemployment data is due out with expectations for 5.5% so anything lower or a fall in full time employment for May could cause the Australian Dollar to weaken. Therefore, if we have some good news with the EU withdrawal bill then I expect the Pound to challenge 1.80 towards the end of this week.
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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