Key Factors that will effect AUD (Daniel Johnson)

Australian Dollar Forecast: AUDGBP gains by 10% since April

Housing Bubble could have long term consequences for the Australian economy

This week we saw the Reserve Bank of Australia (RBA) minutes and the tone was positive as the economy starts to look healthier. This could pave the way for future monetary policy changes. The main worry down under at present is consumer spending. We recently witnessed the biggest fall in retail sale in over four years. This can be put down to the inflated housing prices in high wage growth areas. Consumers have been forced to curb there spending and spend their money on necessities. Property prices continue to rise due to foreign investors being willing to pay the over inflated prices which is hurting the natives. (I use that term loosely) The housing bubble could hurt the Australian economy long term. New Zealand’s new Labour government recently put in place a law to stop foreign investors buying residential property, it will be interesting to see how this pans out.

Iron Ore price can cause swings in Australian Dollar Value

Iron ore is Australia’s biggest export and is predominantly purchased by the Chinese. A client recently sent me a very interesting article which clearly shows a correlation between iron ore price and the value of the Aussie. Although Chinese growth is impressive it has been slowing and when there is a dip iron ore price falls due to the fall in demand, this then hits the Australian Dollar. A more stable economy needs a more diverse form of income rather than heavy reliance on a specific raw material. If you have an Australian Dollar requirement it would be wise to keep an eye on iron ore price.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving. I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.