News of this morning’s GDP movements provided Australian Dollar BUYERS an opportunity, as both the Quarter on Quarter and Year on Year figures have showed a slowdown. QonQ came in at 0.3% against a predicted 0.7% and YonY came in as a reduction down from 3.1% to 0.7% – a substantial reduction! As the Australian economy is so reliant on the Chinese manufacturing sector, Australian figures have been expected to reduce on the back of slowing Chinese figures. Iron Ore is the primary Australian export and not only are the Chinese using less to make steel, the price as a commodity is falling. At times of commodity price crashes, investors look to move their money away from risky options (both Iron Ore and the Australian Dollar), and in to ‘safe haven’ currencies like US Dollar.
Looking forwards, don’t expect these levels to last consistently. Bank of England members seem keen to consistently talk exchange rates down to prevent a strong pound from hampering international trade. Therefore if you are looking to BUY AUD, I’d get something booked sooner rather than later to take advantage.
If you have an exchange to do and want the best rates of exchange, please feel free to drop me a line to discuss…
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