We have seen a good run of form for Australian Dollar exchange rates over the past few months, but there do appear to be a few crack forming around the Australian Dollar and there are now some analysts that feel we may start to see the AUD weaken off a little in the coming weeks.
Firstly, cases are rising in Australia – Over the past few months Australia had managed to be one of the better performing countries in the world when it came to COVID-19 cases and deaths, however a recent surge in cases in and around Melbourne has led to a number of actions being taken to control the virus and stop the spread.
Fears are that we do see Covid-19 start to grasp Australia which might start to weigh heavily on Australian Dollar exchange rates, arguably one of the reasons for the recent gains had been due to the economy still moving along and minimal lockdowns taking place but should that tide start to turn it is likely that the Australian Dollar may follow suit.
This part week we have seen a slight gain for AUD USD exchange rates, a flat pairing for AUD EUR and a small loss for AUD GBP over the course of the trading week.
There are notable issues over in the U.S at present, with COVID-19 being a large factor within these alongside an election which is due to take place in early November.
The issues the virus has raised in America are likely to cause a huge economic hangover and with the States still having 55,0000 confirmed cases in their reporting yesterday the problem is not going to go away anytime soon.
With this in mind we may still have a little further for AUD USD to gain, Australian cases sat at a mere 700 yesterday but people will be watching for an rising trend and this is where we may see a drop off in the value of the Australian Dollar.
Against the Euro we have had a rather flat week, interbank exchange rates remain just above 0.60 as it stands and there has been no major drama for either side of this pairing. Brexit talks and the fear of a second wave within Europe may be the two key drivers for where the Euro may head in the coming weeks, and as above should cases continue to rise in Australia we may see weakness for AUD exchange rates.
Against Sterling much really does now depend on what happens next with Brexit, this has been a key focus for traders for a few years now, realistically an agreement needs to be in place in the next two months for preparations to take place.
It is widely expected that an agreement may be reached, if only a bare bones agreement that will need to be fleshed out later down the line, it doesn’t appear that either side have a no deal Brexit as their first choice.
Any agreement is likely to strengthen Sterling exchange rates, purely for taking no deal off of the table, however should talks fall through then anyone looking to sell Australian Dollars may see the pound drop in value fairly quickly.
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