Will the Australian dollar weaken again is a very good question but for the time being the worst fears on China have not been realised and the currency has bounced back! The Australian economy represents a very good return for investors from overseas as they have a very strong interest rate which will give investors a much higher yield and return more for their money. The Australian economy is however very susceptible to worries and fears from the global economy and any signs that stock markets will keep falling and the Chinese economy is slowing could see a big sell off. However this trend has not yet fully established itself despite many stock markets entering bear market territory. A bear market is where the market moves lower aggressively…
The Reserve Bank of Australia meet next month to discuss policy and whilst on balance I expect the next move from the RBA to be a rate cut, I don’t think we will see this next month. Markets will be keenly awaiting further activity and news from China to establish what kind of market we are currently in. Will the rate weaken much further? Well yes potentially if and when the RBA cut their rate the Aussie will weaken but if sterling keeps on sliding this event would be a very dangerous thing to hold out for.
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