The forecast is that the Australian dollar will remain very well supported as data from China remains positive and Australian data too shows improvements. Unexpected improvements in the Australian Unemployment figures highlighted an economy in much better shape than many predicted. Many of my clients however have been much less bullish about what is going on with the Australian economy citing further worries and wobbles likely up ahead. A key factor is the decline of the Mining sector which has lost millions of dollars of revenue in recent months. Expectations are that the fall in commodity prices seen in recent years is not going to suddenly return to form quickly. Yes there have been improvements but this is not enough to really kickstart the Australian economy!
The weaker pound is likely to continue as we approach the UK referendum and much hinges on the outcome. Both camps have strong public support and I do foresee excessive volatility on GBPAUD rates as we approach the event. Later in the year there are predictions for an Australian interest rate cut although if conditions continue as the data suggests this might get pushed even further back thereby further helping Aussie sellers, ie helping the Australian dollar rise.
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