The Australian Dollar has continued to get cheaper recently. A majority of this was seen at the turn of the month which was down to a large amount of profit taking from traders but also news from the US market. The AUD is used widely in a carry trade. This is one of the major reasons why money moves so much each day and is traders speculating and investing. A carry trade is when they borrow in a low interest country where it is cheap and invest it in another with better returns. So for example borrow money in the UK and invest it in Australia. This form of investment has a large factor of risk and the amount that goes is dependent on a number of factors including global risk appetite. The US market as the largest economy in the world is seen as the barometer of global growth. So when their data improves it increased the amount of risk that traders are happy to take. So lots of people sell the GBP and buy the AUD changing its demand and therefore its price.
This is one of the factors why we see rates today at the highest levels we have seen since March so a 4 MONTH HIGH.
My view is that this trend will continue this week. The UK releases more positive economic data probably tomorrow and Thursday pushing up the value of the Pound allowing traders to buy the AUD cheaper. There are also opportunities for the AUD to fight back as it also publishes data including Unemployment and consumer confidence. All meaning that volatility will continue to be a factor allowing a well-timed trade to maximise the currency market.
Here we can put light on when this may happen, highlight when it is happen and allow our client base to take advantage. If this is of interest make sure to get in contact. Even if you already have another currency provider, spending 10 minutes to compare your prices could easily save you several percent. Does not sound like much but on a property purchase of $200,000 this is THOUSANDS.
Contact the author STEVE EAKINS via [email protected] for more information.