Chinese Growth Slowing causing GBPAUD exchange rate to increase

Australian Dollar Forecast – Unemployment Weighs on Sentiment

According to a report published by Goldman Sachs China’s economy is expected to slow down to about 7% over the next ten years but its stock market is still resilient to a slowing of growth. China has clearly demonstrated excellent growth figures over the last few years but more recently the quantity has been more than the quality which has put some companies off from trading with the country. China’s annual growth has measured an average of 10% over the last thirty years so an immediate slowdown is unlikely but I’m certain we’ll see a slowing over the next few months as Europe and the US are struggling to grow themselves. With the Australian Dollar exchange rate having improved  over since the global credit crunch of 2008 by almost 40% against Sterling as it distanced itself from global debt the country has seen a huge influx of funds from China owing to the successful mining region and Australia’s reluctance to involve itself in international fiscal problems. The slowdown in China is the seventh consecutive quart of slowing growth and I would expect this to continue but compared to Europe and the UK which are rooted in recession I think it’ll remain strong in comparison for quite some time.

The effect of a slowing Chinese economy could mean less risk appetite for the Australian Dollar but with if the RBA does not cut interest rates at this week’s meeting we could see a strengthening of the AUD against USD, Euro and GBP so if you have a currency requirement and are not sure about how to save money when transferring currency please do not hesitate to contact me directly Tom Holian teh@currencies.co.uk for more information

KEY DATA WATCH

The Reserve Bank of Australia meets on Tuesday and my personal thoughts are that we’ll see a rate cut providing a good short term opportunity to buy Australian Dollars. See the following link for useful insight http://www.heraldsun.com.au/business/terry-mccranns-column/reserve-bank-of-australia-best-placed-to-move-to-new-world/story-e6frfig6-1226484530830 or ask me a question Tom Holian teh@currencies.co.uk