This Australian Dollar forecast will address the factors that could have an effect on AUD exchange rates over the coming weeks. The table below looks at the difference between the rate you would have achieved when purchasing £200,000.00 during the high and low points of the past month.
|Currency Pair||% Change||Difference on £200,000|
Early Tuesday morning we have the latest Australian interest rate decision and Rate Statement. The Australian dollar has been much weaker in recent weeks, partly as a result of the reduced likelihood of an interest rate hike in Australia. Investors who had previously been backing the currency believing it would strengthen longer term have been deterred by more neutral commentary by the central bank.
A 0% change in Retail Sales announced last week against an expected increase of 0.4% will have done little to bolster the case for hiking rates longer term. Friday morning sees the latest RBA Monetary Policy Statement too so all in all a very busy week for the Australian dollar.
As well as the data covered here and in my sterling section, there is also Chinese data to factor in here. As Australia’s biggest trading partner the ups and downs of the Chinese economy influence the Australian dollar.
Wednesday sees key Trade Balance and Import / Export figures for the Asian dragon whilst Thursday has the latest Inflation data for China. Donald Trump is also visiting China where news of any progress or problems could unsettle the Australian dollar.
GBPAUD is hovering above 1.7 after a difficult last week in which it struggled following the UK interest rate hike which ultimately disappointed investors. Attention could now well shift back to the UK’s uncertain economic situation and Brexit fears, none of which appear to be offering a huge amount of support for the pound.
Longer term improvements in the Australian economy which is growing faster than the UK would indicate the Australian dollar would outperform. Political concerns have arisen lately in Australia too with Australian law stating only Australian citizens can enter government. This has seen the Deputy leader take a fall and could see the Aussie weaker in the future. However on the face of it the political uncertainty down under is unlikely to outweigh the ongoing political uncertainty of the UK.
On balance I feel the pound could lose further ground against the Aussie but the Australian data this week could offer some short term opportunities. If you need to sell or buy the Australian dollar please get in touch today to discuss the best strategy to maximise your position. Feel free to get in touch on 01494 725 353 or email me here.