This Australian Dollar report will examine the factors that could affect exchange rates in the coming weeks in order to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have achieved when buying £200,000 at the high compared to the low points during the past 3 week.
|Currency Pair||% Change||Difference on £200,000|
I am of the opinion that the Australian Dollar could be in for a rough time. Retail sales data recently fell to the worst levels in four years and this is predominantly due to the increase in property prices. High wage growth areas such as Melbourne and Sydney are becoming more and more expensive and Australian's are being forced to spend their money on necessities rather than luxuries which is hitting the economy. Foreign investors are willing to pay the escalated prices which is not helping the problem.
There is also an anticipated rate hike by the Federal Reserve in the US. The Australian Dollar is a favourite for investors due to the promises of high returns due to the attractive interest levels offered. The Australian interest rate is currently set at 1.5%, if the FED raises rates as predicted to 1.5% on Wednesday this would put Australia and the US on par. With the US Dollar considered to be a safe haven currency investors could well leave the Australian Dollar for the safety of the US dollar which could cause Australian Dollar weakness.
The Mid-Year Economic and Fiscal Outlook is published by Australian Government, updates the economic and fiscal outlook from the previous budget. If there is a dovish tone the Aussie could suffer. This could well occur considering the dip in retail sales.
Unemployment data is due in Thursday and I expect there to be a drop slightly above the expectation of 5.5% which could cause Australian Dollar weakness.
Thank you for reading today’s market report, I would greatly appreciate any feedback you have and would take pleasure in replying personally. I am more than happy to assist you with any of your currency requirements. Feel free to e-mail me here.