Australian dollar exchange rates are very volatile at present having not really settled following a very uncertain period. The change in forecast by the Reserve Bank of Australia has seen the Australian dollar strengthen and any immediate weakeness seems very limited. Having said that the Australian election is looming on the 2nd July and as we approach this date the market is likely to weaken as investors fears over the outcome rise.
The economy is a key talking point with the Labor party accused of threatening Australia’s AAA credit rating from policies. Criticism aimed at the government is Unemployment and the loss of Mining jobs and the scrapping of many welfare benefits in recent years, for example Maternity benefits. Expectations for the Australian economy to return to a budget surplus are key to the longer term aims from the current Prime Minister and Liberal Malcolm Turnbull.
The current Australian polls are neck and neck with the Liberals on 41%, Labor on 36% and Independents and Greens making up 10% each. This could easily trigger lots of movement on the Australian dollar in the coming weeks, whilst no Interest rates cuts are now planned by the RBA, there could be a much increased likelihood form a market perspective if anyone but the Liberals win.
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