The Australian dollar has been under some scrutiny as the market gears itself up for two major events which might move the market, there is a growing pressure regarding the uncertainty surrounding the G20 Summit, plus an uncertainty surrounding the outlook from the RBA. The Australian dollar is driven through a variety of domestic and global events, I would not be surprised to see a turbulent week in early July.
There is a very important G20 meeting taking place currently, which may see the Trade Wars topic being discussed, a key factor on the Australian dollar rate since it links back to sentiments on global trade. The Trade Wars have seen the Aussie rise in fall in value, as the market appreciates or dislikes the progress and develops on the trade issues. As a major exporter to China, the Australian economy is sensitive to any news that might help or hinder the Chinese economy.
Domestically, the prospect of Australia lowering rates could see the currency weaker, as the RBA seek to cut interest rates following some weaker inflation data and concerns about the Australian economy. The Australian economy has been waning under various pressures, including the fact its economy has been growing without recession for 27 years. At some point the economy will suffer and struggle, much of the growth in Australia is attributable to China and its dominance, signs of a slowdown could see the RBA cutting interest rates next month.
All in all, it looks like a very interesting time for the Australian currency. The market is becoming increasingly concerned over the future outlook for the Australian economy domestically but also how global events will shape the market. If you have a transfer to make in the coming days, months and weeks, please don’t hesitate to speak to me directly to learn what else is driving the market.
Thank you for reading and best wishes.