Why is the United States having a major impact on the Australian Dollar? (Dayle Littlejohn)

Pound Pushes Higher Against the Australian Dollar on Recent Economic Divergence

In recent weeks  the Australian dollar has been losing value and has now dropped to a 5 month low against the US dollar because of the appointment of Donald Trump as President-Elect.

Mr Trumps outbursts about China and future trade agreements puts pressure on commodity currencies that heavily rely on the 2nd largest economy.  Furthermore China’s last round of stimulus is coming to an end therefore a slowdown is expected for China and therefore the Australian dollar. If this is the case I expect commodity prices to fall.

Next month the US will release their latest interest rate decision and its widely expected that the FED will raise interest rates. If this is the case I expect to see a sell off of Australian dollar to buy US dollars and consequently AUDUSD will break through 5 month lows.

GBPAUD forecast

In recent weeks GBPAUD has increased 10 cents. With the US likely to hike interest rates and a slow down in China I believe the Australian dollar will continue to fall against sterling. For Australian dollar buyers there is a good chance exchange rates will continue to improve for the remainder of the year.

However  Brexit negotiations and the Supreme court ruling early next year will put pressure on the pound and then we could see a reverse in exchange rates. For Australian dollar buyers within the next 6 months I would recommend trading this year and banking the Australian dollars now.

If you do not have all of your sterling available you can lock into exchange rates now and pay later by using a small deposit. This is known as a forward contract.

If you are trading Australian dollars in the next 6 months I would strongly recommend getting in contact to discuss your situation. The company I work offers a proactive service to offering economic information whilst having the ability to offer award winning exchange rates. Feel free to email me with your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company.

My direct email address is drl@currencies.co.uk and I will personally respond once I am back at my desk Monday morning. Enjoy the rest of your weekend and I look forward to speaking with you soon.