The Australian Dollar had a rocky 2019, with three interest rate cuts from the Reserve Bank of Australia (RBA) which left the rate sitting at 0.75%. However, the latter of the year appears to have turned positive for the currency. As the last day of the year approached, the AUD saw itself overcome the downtrend it was on and overturned the losses it experienced against the USD in 2019. The US-China deal is also due to be signed which lends the AUD more support as a currently weaker USD allows the AUD to edge in their exchange rate cross-over.
AUD Overturns 2019 USD losses
The Australian Dollar overturned its 2019 losses against the USD as the end of the year approached. The Aussie rose 1.3% against the USD last week and rose by 3.67% for the month of December. This allowed the AUD to chop its 2019 losses down to -0.59% ahead of the year-end. Economists are suggesting that the AUD is performing well, but still has some way to go to catch up to the Pound Sterling which gained 0.48% in the GBP/AUD exchange rate last week and is still up some 3.7% for the whole year.
Positive Economic Data Has Helped out the Australian Dollar
A recent stream of positive economic data has offered the Australian economy a helping hand to reach the finish line of the year. Most notably, the November jobs data which saw a fall in the unemployment rate across Australia and a creation of 39.9k new jobs for the month. With positive news coming from the economic front, the chances of an RBA rate cut for February are beginning to lessen. This is positive news for investors as a rate cut would see it drop to around 0.5% and the AUD would likely lose strength in the global market.
Us-China Deal Set to Be Signed, Aud Set to Rally on Completion of ‘Phase One’
Vice Premier Lui He is set to travel to Washington on Saturday in order to sign the ‘phase one’ deal between China and the US. Upon completion of the deal, the AUD will be poised t rally as it will benefit from an uplift in the Chinese economy as US tariffs are lifted on the country. The global economy will also benefit from this deal so investors around the world are keen to see the deal go through.
For more information on the Australian dollar and assistance in making transfers when either buying or selling Australian dollars please contact me, James at [email protected]