Towards the end of last week the Australian dollar lost value against all of the major currencies due to RBA governor Philip Lowe announcing that it was unlikely the RBA would raise interest rates anytime soon.
Within my last article I suggested this would be the case, as the Governor in recent months has made it clear if the Australian dollar continues to strengthen in value, this could have a negative impact on GDP and the amount of jobs that are created.
The Australian dollar also took a tumble due to a further fall in the commodity iron ore. Iron ore is Australia’s largest goods export and over the last six trading sessions is down 13.7%. There is a direct correlation with iron ore and Australian dollar exchange rates. When iron falls exchange rates fall when iron rises exchange rates rise.
However the Australian dollar didn’t devalue much against sterling this week as Theresa May’s lack lustre speech in Florence Friday left the currency markets wanting more and therefore a sell off of sterling occurred. The PM gave no indication to how much the UK would pay the EU when the UK departs and this is what the market was anticipating.
It’s a quiet week for Australian economic data releases, the only release to look out for is Private sector credit Friday morning however this isn’t normally a big market mover. For people that are buying or selling Australian dollars this week should also analyse the other currency that you are converting.
If you are making a currency conversion in the upcoming weeks or months, I would recommend emailing me with the currency pair you are converting (AUDUSD, AUDEUR, AUDGBP) the reason for your transfer (business transaction, property purchase) and the timescales you are working to and I will respond to your email with my forecast and the process of using our company firstname.lastname@example.org.
Enjoy the rest of your weekend and I look forward to speaking with you Monday morning.