The Australian Dollar has had a volatile few weeks changing by over 10 cents within the last fortnight. This is due to a number of massive topics in the currency market having their impact. We first had China and US data which improved the demand of the Australian Dollar pushing up its value and making it more expensive to buy, we saw levels fall from the high of 1.90 to the lows of 1.81. This week it has recovered back up to 1.85 and a majority of this was again seen from a change somewhere else in the world, this time SWITZERLAND. Yesterday the central bank there stopped the pegging system against the euro causing a real shock in the market. The CHF grew in value by over 30% at times yesterday which was frankly scary! As this was happening everybody wanted part of the action and traders with exposure in Australia withdrew their cash to arguably either move it into safer investments or risk on the speculation about the value of the CHF. This is a pattern we saw against a majority of ‘commodity based currencies’ yesterday with most losing by over 1.5% in value through the day and this is something I expect to continue to see through this afternoon.
Moving forward, this could easily be a sign of things to come. Part of the reason why the Swizz bank did what they did was concerns about what the European Central Bank will do next Thursday. I would simply say that anyone with AUD exposure should really keep an active eye on the markets and be ready to move in an instance. There are opportunities but only for the quick movers. Here we help people do that along with helping people with the physical exchange. If you would like more information on this matter please feel free to contact me on [email protected]