Mining Industry Problems affecting Australian Dollar (Tom Holian)

Australian Dollar Forecast: AUD Holds Firm Against US Dollar
Tom Holian

During 2013 GBPAUD exchange rates moved by 30% from the high to the low and we have seen exchange rates hit a 4 year high earlier this year in January. The Chinese slowdown has caused a ripple effect on the Australian economy particularly for the mining industry which has been the key catalyst for growth in Australia over the last 10 years. Indeed, in recent months billboards appear to be going up all over western Perth with commercial real estate agents looking to lease empty buildings which have previously been occupied by large conglomerates. Australian unemployment has hit a hit of 6 years and this has really been caused by a slowdown in demand for Australia’s natural resources.

With the Reserve Bank of Australia announcing recently an end to their interest rate cutting cycle this helped to stregthen the Australian Dollar vs the Pound by 4% in about a week but since the news Sterling has regained most of its recent losses as the British economy continues to release positive data whilst the economy down under struggles.

The RBA meeting minutes will be published on Tuesday morning which will I predict cause a lot of volatility for exchange rates shortly after the release. A few hours later on Tuesday morning at 930am UK inflation data is released and inflation in the UK recently hit the government target of 2% for the first time in 4 years. The IMF recently predicted that the UK will be the first major economy to raise interest rates and although this is not expected till later this year the positive effects are already being felt.

If you have currency transfer to make and want to save money compared to using your bank then contact me directly Tom Holian teh@currencies.co.uk