Australian dollar forecast: Will the Australian dollar weaken ahead?

The latest movements on the Australian dollar have seen the currency slightly stronger as investors buy into the Aussie following a more optimistic outlook on the Trade War concerns, plus the lack of any more immediate cuts from the RBA (Reserve Bank of Australia).  The RBA in their commentary have seen potential for more cuts ahead but have not directly signalled them, hence the Aussie rising.

Clients looking to any Australian dollar transfers might wish to consider the latest developments in these scenarios, as whilst to a degree the potential for the Aussie to weaken is present, the actual turn of events does not seem to be causing this. Allow me to elaborate! Generally, the cutting of interest rates will cause the currency concerned to weaken.

Therefore, with the RBA cutting interest rates, it might be perceived that the Australian dollar would weaken. However, with the RBA not looking to make any more immediate cuts, the currency has actually strengthened. The cutting of rates up ahead could be a factor that would weaken the Australian dollar in the future, clients looking to buy or sell Australian dollars up ahead might benefit from a quick review of their situation with one of our team.

The Trade Wars are another example of the uncertainty up ahead that whilst generally negative for the Australian currency, have also been more positive for the currency lately. The Australian dollar is trading at some of the best rates this year against the pound as the uncertainty of Brexit, plus the recent optimism for the Aussie dollar itself, all helps to lead to the rate dipping below 1.80, into the 1.79’s.

The Australian dollar has not completely shifted the potential for weakness, but with the potential for further cuts ahead, and also the trade wars still possibly an issue in the future. If you have a Australian dollar transfer for the future, and wish for some of the latest news concerning the rates and the market, please do get in touch.

 

For more news on foreign exchange rates and to request a free no-obligation quote visit www.currencies.co.uk