The Australian Dollar has had a better start to the week, making gains against all major currencies as investors and speculators started to favour the Aussie over the safer haven currencies.
This trend may get a further boost or we may see it turn around tomorrow morning when we have the release of the RBA (Reserve bank of Australia) interest rate decision and monetary policy statement.
No change to interest rates are expected, however it will be the tone of the approach from the RBA that will be the likely market mover. In previous meetings the RBA have expressed concerns over rising household debt, issues with the Chinese economy, house prices and various other factors that are halting the rise of interest rates in Australia. A continuation of this tone from the RBA may well lead to Australian Dollar weakness and a more positive overview will likely give the Australian Dollar strength.
Where the Australian Dollar may find difficulty is if interest rates start to fall further behind other larger economies such as the U.S. At present interest rates in the U.S have now climbed higher than those in Australia Following a sustained period of interest rate hikes, this has led to a flow of money out of the Australian Dollar and back in the U.S due to it offering a higher level of return and being deemed and a much more stable currency.
There are a number of factors that could dent the AUD in the coming weeks and months including further economic issues with China, further political issues within Australia, global attitude to risk decreasing due to trade wars or rising tensions between other countries and the general health of the Australian economy.
Any one of these issues could rise further to knock back the Australian Dollar in the near future so I still personally feel that AUD selling levels are good for the current market conditions, and I would not be surprised to see the Australian Dollar take a knock back in the coming weeks ahead, however there are many surprises that pop up that may change that view.
If you have the need to exchange Australian Dollars into any major currency, or to buy Australian Dollars with another currency then you are more than welcome to contact me and I will be happy to help you personally. You can email me (Daniel Wright) on [email protected] and I will be happy to get in touch with you to discuss the various options available to you to maximise your exchange.