US Federal Reserve could cause Australian Dollar weakness (Tom Holian)

Sterling vs the Australian Dollar has had a mixed week in spite of Australian GDP falling for the first time in 4 years.

Australia has been one of the only countries in recent years to a avoid a recession and has prospered by having interest rates higher than those available in many other strong economies.

However, with the RBA having cut rates twice this year and with the US Federal Reserve due to meet next Wednesday we could see the AUD weakening if the Fed choose to increase interest rates.

I personally think the Fed have been ready to do this for months and with the US election now out of the way I think it’s almost a foregone conclusion.

Typically this sees US Dollar strength as global investors sell off riskier currencies including the Australian Dollar to invest in the US.

Therefore, if the Fed do raise interest rates I expect to see the Pound make gains vs the Australian Dollar and this could see rates challenge 1.70 during the middle part of the week.

On Tuesday morning the UK publishes inflation data and if we see a rise I also think we could see Sterling strengthening vs the Aussie Dollar.

The ongoing Brexit issue continues to dominate the headlines and we are not likely to hear the result of this week’s Supreme Court ruling until early January so expect the volatility for Sterling vs the Australian Dollar to continue.

 

Having worked in the foreign exchange markets since 2003 I am confident that not only can I offer you bank beating exchange rates but also help you with the timing of your transfer of money.

If you need to buy or sell Euros and would like a free quote then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

 

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