Following the relentless losses for the Australian dollar recently today has been expected by some. Today we have seen the Australian dollar gain following a “profit taking” exercise. This is when traders that have bought a position sell that trade to recognise the profit made. In this case as a large amount of money has changed hands it has changed the demand for the currency and therefore its price. It has given some light relief for people holding the AUD looking for a time to trade out and I personally would be taking it with both hands.
The underlying bet about interest rate change at the Reserve bank of Australia still stands and until that view changes in the market it in very improbable that the dollar will continue to gain strength. Later this week we also have key data from China which is also expected to help Australian Dollar holders.
When shall I trade the Australian Dollar?
Well on the assumption that you need to trade within a 7 day period I would be buying Dollars ASAP and suggesting sellers to hold off till the end of the week.
My longer term view is that the Australian dollar will probably return to this weak position and even extend it by the end of the month. Especially as speculation about fiscal policy and asset buying policy globally continues to develop in places like the UK, the US and Japan. All of which will have an impact on the risk appetite and carry trade which impacts the strength of the dollar greatly.
If you are looking at moving money internationally and want to see how this information could impact your money, feel free to get in contact. Simply contact myself Steve Eakins on the normal number or via email at [email protected] for a quotation to see how much you could save. If you are interested in our pro-active service trying to help you maximise your trade in the market please also get in contact in the same way.