Daily Archives: August 22, 2017

US economic conditions causing Australian Dollar strength (Daniel Johnson

 Australian Dollar holds higher appeal due to US economic uncertainty

Investors are favoring higher risk currencies following increasing US political and Federal Reserve uncertainties along with increases in commodity prices.The chances of a Fed rate hike are low due to Trump’s outlandish comments  and commodities are in high demand for investors. This has seen higher demand for commodity based currencies such as  AUD. Australia’s biggest export is  iron ore and it nearly reached $78 a tonne during Friday’s trading, the highest levels we have witnessed since April.

The RBA have tried jawboning, attempting to talk down the value of the Australian Dollar rather than making any drastic changes in monetary policy. It is not having the desired impact and GBP/AUD currently sits in the low 1.60s. The Australian Dollar is performing well against the majority of major currencies and could be set to continue. If investors continue to leave the US dollar in favour of higher returns from the Australian Dollar we could see Sterling suffer further against the Aussie.

Janet Yellen, the head  of the Federal Reserve is speaking at the Jackson Hole Symposium on Friday.The Jackson Hole Symposium is an annual symposium held in Wyoming. It is a forum for central bankers, policy experts and academics to come together and discuss monetary conditions and policies. If she gives  any hints to a rate hike in the US the Aussie is likely to weaken and we could see small gains for Sterling. This is rather clutching at straws however as there is very little reason to think the pound will make large gains.

If you have a currency requirement I would be happy to assist. You need to have an experienced broker on board in order to take advantage of rates when a brief spike occurs, especially in the current climate. If you have a currency provider already in place I am prepared to perform a comparison against them. It will take minutes and could potentially save you hundreds or even thousands of pounds. I can be contacted at  dcj@currencies.co.uk.