Yesterday afternoon’s trading session was dominated by US Fed Chairlady Janet Yellen as she suggested that any US interest rate rises may not happen as quickly as previously expected.
With less chance of an interest rate hike in the world’s leading economy this has encouraged a bit more risk appetite for global investors which has led to a brief period of Australian Dollar strength vs Sterling.
However, tonight all things could change as RBA governor Glenn Stevens will address the markets.
With oil prices having fallen, nickel prices struggling, the falling price of commodities and the combination of a global slowdown I think the RBA are gearing up for an interest rate cut in the future.
Global currency rates have moved in a very strange fashion during the last fortnight with huge swings on both the Japanese Yen and the Swiss Franc and when this started to happen a few years ago suddenly there was a big shift on GBPAUD exchange rates.
Although the chance of seeing the enormous swings we saw a few years ago I do think we are entering into a period of uncertainty for the Australian Dollar.
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