Daily Archives: March 6, 2018

AUD makes slight gains against most majors – Plenty for the market to get stuck into this week

Tomorrow morning sees the release of Australian GDP (Gross Domestic Product) or growth figures for the fourth quarter of 2017. Expectations from major analysts is that we may have seen a slight slip from 0.6% to 0.5% Month on month so this could give the Australian Dollar a poor start to the trading day.

Earlier in the week we had the RBA interest rate decision and rate statement which didn’t throw up any major surprises, wage growth is still a concern for the RBA which will more than likely hold them back from raising interest rates and this could weigh on the Australian Dollar.

Thursday morning brings import and export data, along with Trade balance figures from Australia. Chinese data is also due out at the same time and due to the huge volume of exports from Australia to China this can also have an impact on the value of the Australian Dollar too.

on Friday we have very little in terms of data from Australia but we do have have Chinese inflation data, expectations are for a slight rise for inflation figures over in China which may give a slight to the Australian Dollar too.

My personal opinion is still that the Australian Dollar may not have a good few months coming up, with little movements in interest rates coming up and other central banks poised to make their move and hike rates in the near future there could be a period of weakness ahead. On top of this there is plenty of global uncertainty out there both with the global economy and numerous areas politically.

Any global uncertainty can also weaken the Australian Dollar as it is perceived as a riskier currency therefore can drop in value when uncertainty is rife.

if you need to carry out an exchange involving buying or selling Australian Dollars in the near future, and you would like to achieve the very best rates on top of the highest level of customer service then feel free to get in touch with me directly. You can contact me (Daniel Wright) by emailing djw@currencies.co.uk and I will be more than happy to get back to you personally.

RBA keep Rates on hold (Daniel Johnson)

Reluctance to change Monetary Policy could cause AUD weakness.

In the early hours we saw the Reserve Bank of Australian (RBA) Interest Rate Decision. Rates remained unchanged at 1.5%, which was no surprise considering current economic conditions down under. Retail Sales data came in just before the decision and was some way below expectations. There was predicted to be a rise from – 0.5% to 0.4%, but there was only an increase to 0.1% which caused the Aussie to suffer.

The Australian Dollar has been a favourite with investors due to its offer of relatively high returns, however the US Dollar now seems to be gaining preference as it offers the same returns and is also considered a safe haven currency.

The Federal Reserve also has a far more aggressive forecast in terms of hiking rates and  it has been rumoured we could see as many as three more hikes in 2018 which does not bode well for the Australian Dollar.

Living costs in high wage growth areas are causing Australians to spend there hard earned money on necessities rather than luxury goods and services. There needs to be an increase in average wage growth before a rate hike can be justified. I am doubtful of any rate hikes by the RBA until 2019.

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Thank you for reading.