The Aussie Dollar has for a very long time been going from strength to strength following China’s rapid growth and their demand for Australian resources. However, in light of a recent report published by the OECD (Operation for Economic Co-operation and Development) has suggested that a global recession in the next two years cannot be written off. Therefore, a risk of a double dip recession for many countries could be likely and therefore have a negative impact on the Australian Dollar in the long term.
The ongoing uncertainty of what may happen in the Eurozone and the US Fiscal Cliff talks could throw some problems into the markets towards the end of this year and cause some volatility on exchange rates. The OECD did however say it expects the Chinese economy to grow for the next two years which can be argued is only a good thing for the strength of the Australian Dollar.
If unemployment rates continue to remain low in Australia and Chinese growth continues this could keep the Australian Dollar’s record of uninterrupted growth of 21 years. With focus on what may happen next week with the Reserve Bank of Australia and the UK deciding what to do with interest rates this could provide some good short term buying opportunities if you need to convert Sterling into AUD.
If you have never used a currency broker before and would like to find out the benefits compared to exchanging currency through a bank then feel free to email me directly or would like more detailed information Tom Holian [email protected]