Australian Dollar loses ground against most major currencies as trade war tension rises

Australian Dollar exchange rates have dropped away against all major currencies in treading today as tensions between the U.S and China rose once again over the weekend.

The Australian Dollar, Canadian Dollar and New Zealand Dollar topped the weakest major currencies of the day and much of this can be pinned down to the uncertainty surrounding the trade negotiations between Donald Trump and Xi Jinping.

As many regular readers will be aware any heightened tensions between the U.S and China can lead to weakness for the Australian Dollar, as the Australian economy can be susceptible to bad news from China.

 RBA meeting minutes tomorrow morning

We have seen a slight improvement in certain areas of the Australian economy recently, however most analysts do not believe that there has been enough to warrant a change in stance from the Reserve Bank of Australia regarding any interest rate changes. Interest rates have remained stable in Australia for a long time now and this is also another reason why the Australian Dollar has lost ground against a number of major currencies over the course of the year.

An higher interest rate will make a currency more attractive to investors as it means they are offered a greater level of return for their money, and with other central banks such as the Federal Reserve in the U.S raising rates on numerous occasions over the past year or so the Australian Dollar has been somewhat left behind.

Should the RBA take a more positive tone in their meeting minutes tomorrow then we may see a little strength back for the Australian Dollar, should their stance remain the same then focus will be back on any political news, such as the trade wars and for those that have an interest in the Australian Dollar against the pound then Brexit and Theresa May will be key.

Should you have the need to buy or sell a large volume of Australian Dollars in the near future and you would like my assistance then you are welcome to contact me (Daniel Wright) directly. You can email me on djw@currencies.co.uk with a brief description of what you are looking to do and I will be happy to contact you personally.

 

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