The Australian Dollar has had a fairly solid start to the week against most majors due to the increased risk appetite seen by investors in the lead up to the pending Federal Reserve interest rate decision due out tomorrow in the States.
Expectations are that we will not see any changes to the interest rate in America but the key driver for the market will be any comments or suggestions as to what future fiscal plans are going to be and how close we are to seeing the rate hike that many expected quite a few months ago.
The reason that this data release can have an impact on the Australian Dollar even though it is predominantly an American release, is because it impacts global attitude to risk and the Australian Dollar can move quite sharply as and when this changes.
The Australian Dollar is a currency that is quite often used one one side of carry trading. Carry trading is where an investor will borrow money from a currency that has a very low interest rate and they will move it over to a currency with a higher interest rate, making the difference on the two.
When risk appetite is high, the Australian Dollar tends to benefit however when risk appetite subsides you tend to see the Australian Dollar weaken fairly quickly.
All in all if you have an exchange to carry out involving wither buying or selling the Australian Dollar tomorrow will be key. If you would like assistance for an exchange either now or in the future then we can also help you. If you are already dealing with a broker then I would be extremely surprised if I could not get you a better deal along with a much more proactive service.
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