US Interest Rate Hike could weaken the Australian Dollar (Daniel Johnson)

AUDGBP: Australian Dollar Weakens in Worst COVID-19 Day Yet

Could there be an Investor Exodus from the Australian Dollar?

The Australian Dollar has strengthened significantly against the pound of late. There has been positive figures from Australia coupled with the uncertainty surrounding Brexit. Data has been so good in fact, Australia has recently overtaken Holland for having the longest successive period of growth without recession. Wednesday could however be an opportunity for Sterling sellers.

Wednesday will see the Federal Reserve US interest rate decision. It has been widely publicised there is the strong possibility of a rate hike. Odds of a hike currently sit at 80%. If the hike occurs, the Australian Dollar will certainly lose appeal to the investor. With higher levels of safety and now higher returns than previously, the US dollar could well be the destination of choice. We could see significant Australian Dollar weakness following the rate decision.

Brexit Update

The House of Lords have put forward two amendments to the exit bill. They wish to have a vote by MP’s on the final bill and they would like the rights of current EU citizens residing in the UK protected.  The bill has to be approved by the House of Commons, however if the amendments are rejected, there is the possibility that article 50 could be triggered as early as midnight this evening. This would definitely be a shock to the markets and you could expect high volatility on the exchange.

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