Australian Dollar Weakness
We saw AUD weakness this afternoon as the markets saw a crash in the price of Brent Crude Oil. Although it seems odd that the price of oil affects an exchange rate, but when a commodity drops in value you tend to see investors taking their money out of the commodity based currencies. It is rare that without say an interest rate decision you would see such a swing – a near 2% loss today, but only serves as to highlight the volatility of the currency markets.
On the northern hemisphere side of the GBP AUD currency pair, the Bank of England releases its Interest Rate decision for the month of November tomorrow. Although it is widely believed that the interest rate will stay the same, the UK economy has performed very well in 2014 so far. The UK are ahead of the primary unemployment rate target set under ‘Forward Guidance’ by Mark Carney, so as much as it would be unexpected – it is possible!
Looking at the market, my opinion is that I’d be looking at selling AUD sooner rather that later. I am of a risk averse nature, so keen to avoid any potential adverse movements and I believe that the market looks poor for the Aussie.
If you have an AUD trade to do, however small or large, please feel free to drop me a line directly on the trading floor on 01494 787 478. If you’d rather email, I’m contactable on AJB@currencies.co.uk
I am confident that I will be able to assist you in achieving the best rate of exchange!