Currency markets move on trends and there is currently lots to be positive for on the Australian Dollar. This is why the Australian Dollar is touching some of the best rates in 6 months.
When will we hit 1.60? This is a question I am being asked frequently by people looking to move their life savings or house sale funds over to Australia. For the time being such rates look out of the question and it looks like anyone with their heart set on such levels may have to wait a long time, indeed it is likely the rates could get worse before they get better.
The Chinese Effect This Friday we have a whole host of Chinese data released to the markets, the key release for me being Chinese Gross Domestic Product or GDP. This is a measure of how their economy is growing. The rate has in recent years been slowly falling but we have seen it steady in recent months, an indication that the economy is not about to suffer a ‘hard landing’.
Make no mistake this is the release which could really affect sentiments on the Aussie. Quite simply if China is doing well, the Australian dollar will perform better. It will therefore become more expensive to buy.
What may happen on Friday? Well the recent Chinese data sets have showed good data in Manufacturing sector, a key component of Chinese GDP. Non Manufacturing data was also positive so it is difficult to see evidence of any ‘hard landing’ or even a soft landing. Also the Chinese trade balance figures improved and this all points to an economy faring well.
Consequently we could easily see some positive data lend further support to the Australian dollar making it yet more expensive to buy. The pound is looking very much on the backfoot at present and further gains towards 1.50 look very real. Saying that a bad data set could easily tip the scales back in the favour of those buying Aussies. On balance I would expect 1.50 to be hit before 1.60…
To be kept up to speed on the latest news and future outlook on any transfers involving the Australian Dollar please feel free to speak with me directly. I work as a specialist currency broker and can offer information on the tools to get you the very best rates of exchange. [email protected] , 01494 787 478