Where next for the Aussie?

AUDGBP Higher but Risks Weigh on Aussie

The Australian currency is now under even more pressure as commodity prices fall and Chinese markets get major jitters. It appears it is now the time for the roaring Asian dragon to come under the similar kinds of pressure as the Western economies suffered in recent years. The stock losses will now likely feed into property and other asset bubbles, it is always the stock markets which crash first.

The follow on for the Aussie is that as confidence plummets in the Chinese markets, Aussie confidence will dive too. The outlook on raw materials which had been so valuable in recent years and underpinned the Australian economy, is falling too. Copper prices dipped some 5% this week, such uncertainty will do little to spark investor confidence in the Aussie.

It would appear that if you need to sell Australian dollars the rates will only get worse in the future as investors scramble to pull out of the uncertain markets. Sterling too is rising as investors believe the UK will raise interest rates whereas the likelihood is the RBA will have to cut them again.

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