We have seen the Australian Dollar lose ground against numerous currencies over the past week or so as we have experienced a slight sell off in the perceived ‘riskier’ currencies, such as the Australian Dollar, New Zealand Dollar and South African Rand.
Investors are finding life tricky at present, with the goings on in America and various economies reporting fairly bad figures of late, it does seem that we are seeing an unwinding of carry trades along with a general sell off, leading to Australian Dollar weakness.
Carry trading is a process whereby an investor borrows money in a currency with a very low interest rate and then shifts that money over to a currency with a very high interest rate, making their return on the difference. As you start to see the Australian Dollar weaken off you also get this gather momentum as investors reverse or unwind these positions to protect themselves from adverse movement and losing the profit they have built up.
We have very little left to come out in terms of economic data from Australia for the rest of the trading week but for those looking to carry out an exchange involving GBP you should be aware that today the U.K has what has been touted as ‘Super Thursday’ where they will have the release of Industrial and Manufacturing production, trade balance, the Bank of England interest rate, inflation report and growth estimates so be prepared for some fairly volatile exchange rate movements as the day progresses.
If you have any Australian Dollars to buy or indeed sell then it is well worth getting in touch with us here at Australian Dollar Forecast. Not only to we aim to provide up to date market information but we also all work for on of the top foreign exchange brokerages in the U.K. Even if you are based in Australia we can still help you too, and we pride ourselves on being able to better the prices of all of our competitors, along with offering a high level of customer service too.
Feel free to get in touch with me (Daniel Wright) if you would like to get a quote to compare with your current brokerage, or indeed your bank and I will be more than happy to contact you personally. You can email me on [email protected] and I will be in touch as soon as I can.