Following a downgrade of global output by the International Monetary Fund the Australian Dollar has lost ground this afternoon following a strong start to the days session. For 2013, the IMF now expects global output to expand just 2.9 percent, down from its July estimate of 3.1 percent, making it the slowest year of growth since 2009. It predicted a modest pickup next year to 3.6 percent, below its July estimate of 3.8 percent and cited China as an economy in particular that should begin to slow, moving from a condition of investment to consumption.
With China the biggest net importer of Australian raw materials, this could have a major impact long term on the value of the Australian Dollar – certainly should the IMF predictions be correct. This to me suggests the pound is likely to gain strength, particularly heading into 2013 and I for one would not be surprised to see 1.80 +
Should you be longer at a transfer shorter term watch out for Westpac Consumer confidence figures tonight, the US FOMC minutes tomorrow for clues on US tapering, and Australian unemployment figures dues out early Thursday morning.
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