Australian Dollar Supported ahead of US Nonfarm Payrolls (James Lovick)

Will AUD to USD Retest the All-Time Lows?

The Australian dollar could be in for an interesting end to the week with US Nonfarm payroll numbers released on Friday. The Australian dollar is heavily impacted by events in the US at the moment as there is growing pressure on the US Fed to raise interest rates, something that in turn impacts on the Australian dollar. There is a 95% chance that the US Feed will hike next Wednesday which could start to see the Australian dollar weaken as funds return to the US where a greater return can be found due to the higher interest rates.

Construction numbers in Australia have performed well and are yet another piece of data that suggests the Australian economy is ticking over nicely. Data from the Australian Industry Group reported that the construction sector actually grew in March having contracted one month earlier whilst the housing market is also performing well.

The UK budget yesterday had little impact on GBP AUD although next week’s political developments with the Brexit bill being debated between the House of Commons and Lords could see considerable volatility. There is a chance that Article 50 could be invoked as soon as next week and with this carries the potential for major volatility for pound dollar rates. The government are likely to announce this on a very large platform for all eyes to see and make a big deal out it. From a global perspective it does suggest there could be considerable market reaction.

Those clients looking to buy Australian dollars could be in for a hugely volatile period and would be wise to consider their options before the major event. On the one hand the pound could see gains as clarity over Brexit is finally offered although the opposite could be said in that the move will be permanent and it means Britain will definitely leave the European Union.

If you would like further information on Australian dollar exchange rates or any of the major currencies and to discuss how we can assist then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on jll@currencies.co.uk