The Reserve Bank of Australia has been predicted to be cutting interest rates in the future, despite not so far making any firm inroads into the plans. Their Tuesday interest rate decision saw the Australian central bank confirm that they are taking note of the recent shifts globally but that it has not shifted their current outlook on interest rates.
The currency markets are however quite sceptical over this seem to feel that in fact the RBA will be forced to cut sooner than later. Global growth has slowed and despite some apparent respite in the Chinese to US Trade Wars, the market seems to think there is more chance of the Australian interest rate being lowered in the future. Expectations are rising that the global economy will slow in the future and and a commodity based currency, the Australian dollar will suffer.
The Australian dollar will rise and fall on the alternating prospects in the global economy, the current belief is that the general trend lower will continue. Of particular concern is the outlook for China where the market is finding concern over what lies ahead. The Chinese economy is suffering as investors face difficulty over what lies ahead and continue to predict a longer term decline of the Chinese economy.
Investors face many challenges in 2019, not least with the rising uncertainty over the negative outcomes from the Trade Wars, which will only see further uncertainty in the future on global trade. Clients with a position to buy or sell Australian dollars should it appears be gearing themselves up for a potentially weaker Australian dollar in the future.
If you have a possible transfer and wish to get an update on the latest news and information concerning the Australian dollar and what might lie ahead, then please do not hesitate to get in touch to discuss this further. We have a range of tools and options to help you to maximise your position, please email me Jonathan Watson on [email protected].