The Australian dollar has been on another downward trend over the last 30 days with a further drop of nearly 5 cents or 2%. Buying the Australian Dollar is now close to the lowest levels that we have seen for 12 months and I am afraid to say that this trend is more likely than not to continue.
We actually enjoyed a push up this week seeing Sterling gain in value by a cent, this positive movement should really however be seen as a short term opportunity rather than a long term trend.
This opportunity came from the early Easter this year which pushed travel costs up earlier than normal, pushing up inflation and Sterling as a result. To take advantage of this opportunity you will need to be relatively quick as we expect the gains to be lost this afternoon following some US information. For live prices, forecasts and options please contact myself STEVE EAKINS through [email protected]
Moving further forward we do expect the trend we have seen over the last 6 months which has wiped over 12% of exchange rates to continue. This negative movement will come from a number of factors; the fact that the economy in Australia is not slowing as quickly as many had thought, China starting to improve pushing demand up for Australians raw materials, concerns about the UK’s future in Europe with the Brexit in 11 weeks and the fundamentals that the Interest Rate in Australia is one of the highest globally in the developed world. You really need to have a very strong argument to want to wait to buy Australian Dollars at the moment, and if you have one you will be with the minority rather than majority.
This morning we saw their latest unemployment data released which showed an improvement in the labour market in Australia – this has already started to eat into the gains we were enjoying at the beginning of the week.