The Australian dollar has had a changeable and big week, with rates falling under 2.0 for the first time since June 2015. This has been driven buy a number of factors but more Sterling Weakens rather than Australian Dollar Strength. Generally in fact the Australian Economy has been weakening and causing more concern globally rather than improving. It was Sterling weakness over the last few weeks which drove levels down towards this historic and major ‘resistance level’. The push over actually came from comments in the US. That being a change in forecast about when interest rates in the US are likely to start climbing once more. This changing forecast drives money between AUDUSD changing demand and therefore value. The latest forecast is that the US will make one interest rate hikes rather than two this year. resulting in money flying from the US into the AUD pushing up its value and therefore breaking the 2.0 barrier.
Moving forward I do expect over 2.0 to return once more but the risk of further falls is high. We have more US data next week which could further confirm the latest forecasts resulting in GBPADU levels falling once more. Please remember than once the ‘resistance levels’ are broken rates can free fall quite quickly. So if we see levels fall to 1.9920 we could very quickly see 1.95.
Worrying news for anyone with AUD to buy!
Remembering that with the outlook for the UK expected to worsen it seems rather likely that anyone waiting for the dizzy highs of 2.20 could be waiting years! If you have AUD to buy in the short or long term now is the time to speak, with levels on hinder hooks now is the time to review the market in more details for all sides of the argument so you can take opportunities and protect yourself from further risks.
For more information feel free to contact myself STEVE EAKINS on [email protected] or call now asking for me STEVE EAKINS on 01494 787 478