Slowdown in the Mining Sector (Tom Holian)

Australia Dollar Lower as Victoria Extends Lockdown
Tom Holian

Sterling Aussie exchange rates have remained relatively quiet this week as we approach the end of the month. However, expect to see Australian Dollar weakness over the next few days as concerns rise about a Chinese slowdown.

Slower growth in the Chinese property market has seen metal prices drop which has affected the mining industry globally. The mining industry in Australia is one of the biggest parts to the economy downunder so this news is not good for the country.

Since the start of the week the UK mining index has dropped by 4.5% and this is mainly driven by developments in China. With an interesting programme featuring Robert Peston on the BBC last week about Chinese debt this has brought the news of the Chinese slowdown into the mainstream and has caused some worry for global investors who may pull out of riskier currencies including the Australian Dollar.

There are mixed opinions about the Chinese economy but my personal feeling is that they cannot continue to maintain their current rates of growth which will inevitably cause problems for the global economy. I think long term we could see further weakness for the Australian Dollar so you may wish to consider buying a forward contract if you’re selling Australian Dollars to buy Sterling.

If you have a currency transfer to make and want to save money compared to using a bank to exchange currency then contact me directly for a free quote. Tom Holian [email protected]