In the early hours of yesterday morning the Australian economy received a shock to the system after Gross Domestic Product figures, which essentially measure a countries economic output, came out substantially below analysts’ expectations weakening the Australian Dollar.
Through the third quarter of this year the expectation was for growth of 0.3% but analysts called this incorrectly after the figure showed that economic output contracted by -0.5%.
On an annual basis, economic growth has slowed down to 1.8% whereas analysts were expecting to see 2.5%.
Should the figure next quarter officially show another reading in the red the country will then be in a recession, which I think could really speed up an already declining currency.
Whether the Pound will exceed the next psychological level of 1.75 depends on whether the Pound continues to come under Brexit related pressure, but I am expecting to see the Aussie Dollar decline overall as the new year approaches.
There’s been a plethora of economic data out of Australia in the early hours this week, with the GDP figures out yesterday morning having quite an impact on AUD exchange rates.
If you’re planning a sizeable currency conversion involving the Australian Dollar and another major currency, it’s worth getting in touch with us to discuss your options as we offer automated trading systems which can help you take advantage of short term currency fluctuations.
Tomorrow morning there will be Home Loans data released offering an overview of the property market in Australia. If you would like to plan around this news release, feel free to get in touch and we can discuss your options. After the disappointing GDP data yesterday, and the Reserve Bank of Australia’s hawkish outlook for the rest of the year at their most recent Minutes, I think AUD could come under further pressure this week should the property market start showing signs of a slowdown.
Further signs this week could point towards economic downturn for the Australian economy, clients looking to trade AUD may benefit from getting in touch with their assigned broker. If you do not have an account you can sign up by clicking here.
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