The Australian dollar appears to be experiencing somewhat of a wobble at present and has lost ground against most major currencies over the past month of trading.
|Currency Pair||% Change in 1 month||Difference on £200,000|
One of the big issues impacting Australian dollar exchange rates is the flow of money leaving the Australian dollar and heading into the U.S dollar.
In fact, AUD/USD exchange rates have recently hit their lowest level in two years. This is likely to be due to the fact that the U.S have continually been raising interest rates yet the Reserve Bank of Australia (RBA) have continued to keep rates on hold.
A hike in interest rates generally will make a currency more attractive to investors, and with the fact that the U.S interest rate has now surpassed the Australian interest rate, investors are now moving their funds out of the slightly riskier AUD and into the seemingly lower risk USD.
It is no surprise that the Australian dollar is finding life tough, on top of the interest rates remaining flat the economy is not performing well either.
Retail Sales figures were below expectations on Monday, and with recent news that house prices are falling in two of Australia’s biggest cities there is concern that spending may slow even further.
Wage growth and high household debt has already been cited as a problem by the RBA. This concoction of problems spell a tricky time for the Australian dollar as all the signs of a potential economic downturn are clear to see.
In my opinion the GBP/AUD exchange rate would be a great deal higher and potentially hanging around the 2 level had it not been for Brexit and the uncertainty that this has brought for the U.K and the pound.
The next few weeks will really be key for anyone looking to buy or indeed sell Australian dollars in the coming few months, so far due to Brexit uncertainty the pound has been one of the currencies that has failed to take advantage of the Australian dollar's poor form.
Positive news on a Brexit deal could see a healthy spike against the Australian dollar, but no progress or bad news may lead to the rate remaining stable or drifting away again.
If you have Australian dollars to buy yet do not have time to watch the markets all day every day, it may be prudent to register with us and let us do that for you. Feel free to contact us today on 01494 725 353 and we will run you through the quick and simple process of having an account set up which will also give you access to rate alerts and many other handy market tools.
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