This Australian Dollar report will address the factors that could have an effect on 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 during trading hours on Wednesday.
|Currency Pair||% Change||Difference on £200,000|
I am of the opinion the Australian Dollar could be in for a tough time ahead. 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 Australians are being forced to spend their money on necessities rather than luxuries, which is hitting the economy.
Foreign investors seem to be willing to pay these escalated property prices which is also not helping the problem.
I am of the opinion that due to the FED’s rate hike yesterday being widely predicted that the damage had already been done to the Aussie. Investors leaving the Aussie and moving to the US dollar for the same returns, but with less risk. The US dollar being considered a safe haven currency despite Trumps antics and heavy debt. I’m more of a CHF fan myself.
The future potential hikes by the FED are a worry, if the hikes go according to plan this will certainly cause the Australian Dollar to lose appeal.
The Mid-Year Economic and Fiscal Outlook is published by Australian Government and is due on Tuesday in the early hours. It is an update on 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.
The Reserve Bank of Australia (RBA) meeting is published two weeks after the interest rate decision. It gives us how the committee voted on the hike and an outlook on the economy. This has been known to influence the markets in the past so is well worth paying attention to.
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