With the Australian Dollar having strengthened against Sterling this month by almost 3% partly fuelled by Mario Draghi’s recent comments that the bond buying programme is unlimited and the Euro is irreversible I personally think these gains could be short lived. For most of this year the AUD has been at historic highs against the Greenback but with jobs slowing down under and with a slowdown in Asia this could see an end to the recent run for the Australian Dollar. The manufacturing sector in Australia has fell victim to the strong exchange rate as it is having a negative effect on demand and hurting profits for companies outside of the thriving mining sector.
Xstrata the largest seaborne exporter of thermal coal has said that the AUD has meant having to cut 600 jobs in a bid to cut costs. With a US slowdown coming this could seriously impact the Australian Dollar as this could also mean the Reserve Bank of Australia may have to cut interest rates which typically has a negative effect on a currency. I have been writing on this website for a long time and hope it is useful and most of all informative without too much jargon. As an experienced currency broker if you have any questions about the Australian Dollar exchange rate then feel free to contact me directly Tom Holian [email protected]
Also, you may find the following link interesting to read if you’ve been observing the Australian economy over the last few years http://uk.finance.yahoo.com/news/time-running-lucky-country-190412954.html