Australian Dollar value has changed significantly this week with swings dramatically changing the price of everything from a property purchase to a business deal. This has been down a number of reasons which we have seen before, however as it is the beginning of the week, quarter and year the trading levels have been much bigger as new positions are placed creating these larger swings. The topics that have added demand and therefore value to the Australian dollar is; China growth expectations climbing and Global growth expected to traders happen to take risks. So to break this down, commentary coming out of China earlier this week confirmed that they were accelerating investment in over 200 infrastructure projects in an effort to increase growth. This expected increase also grows the demand for the raw materials from Australia, strengthen their economy and their currency. US data continues to improve along with the likelihood that they will raise interest rates this year. As seen as a barometer for global strength traders appetite for risk has increased meaning they are happily investing in Australia, more money into the economy, increases values and makes it more expensive. This has been added to by new investment levels being set for the beginning of the month, quarter and year. On top of the above sterling’s value has been under threat. As the UK is so dependent on exports to Euro who are their largest trading partner, the recent demise and worries for Europe has weakened demand for the Pound and therefore its value.
So all of the above explains why levels are where they are, but what about the future, will this continue?
In simply terms I personally think it will yes, rates are more likely to continue to fall rather than climb. So if you have AUD to buy in the near future I would be worried. Saying all of the above however this just confirms the trend we are likely to see. Rates do not move in a straight line so timing a trade well will still make a great difference in getting the most from your money. Here we help with exactly that, educating our clients on market movement along with days in the future that they should be aware of. If that is a service you are interest in or if you would like more information on the above please feel free to get in contact with myself. My name is Steve Eakins and I can be contacted via email at [email protected]
I look forward to hearing from you.