What are the Implications of the US Rate Decision on AUD? (Daniel Johnson)

AUDGBP Higher Despite Wage Subsidy Job Losses

The US rate decision comes in tomorrow at 19.00, expect volatility across all major currency pairings. The general consensus is there will be a rate hike, most economists predict to rise by 0.25% although there is the outside chance of it rising to 0.5%. If this occurs expect big swings on the market. How AUD value is going to be very difficult to predict. If I had to make a call on GBP/AUD I would expect AUD strength, my reasoning behind this is due to an increase in faith in global economy. The US is the world’s largest economy and this shows confidence in the world economy going forward. This confidence could well cause Investors to move into riskier currencies such as AUD for higher returns.

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