Australian dollar outlook remains negative

AUDGBP Strengthens Against but AUD Lower Against USD and EUR

I still feel the outlook for the Australian dollar is negative due to fears of a slowdown in Asian economies. Japanese GDP overnight came in much lower than expected at 0.7% versus 0.9% expected which is indicative of the sluggish growth in the region. Factor in the huge amounts of QE undertaken by the Japanese economy and the picture looks very worrying to me. Just how will they rescue this position?

The Reserve Bank of Australia have a bit of a task on their hands to rescue the economic fundamentals if the economic position of the surrounding economies is deteriorating. They will perhaps be forced to lower interest rates further this year which is likely to have a negative impact on the Australian dollar exchange rate. I think it is worth noting that the UK is on course to look at raising interest rates in the coming year which means the pound is bound to strengthen against the Aussie. All in all I think if you are selling Australian dollars to buy GBP, moving sooner is the best course of action.

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