The Australian Dollar has weakened today following news of further economic problems for Turkey.
The Turkish Lira hit an all time record low against the U.S Dollar this morning and this is starting to impact all major currencies.
With the Australian Dollar still being perceived as a ‘riskier’ currency this has impacted the value of the Australian Dollar against all major currencies, making it more expensive to buy.
Emerging market currencies have been hit the worst as traders jumped into safer havens and I still feel this problem may escalate further, so the Australian Dollar may have a difficult week ahead.
In terms of economic data from Australia this week, the key release will be on Wednesday night, where we have the release of Australian unemployment figures, and expectations are for the unemployment rate to have risen slightly from 5.4% up to 5.5% which would also not be great news for the Australian Dollar.
The RBA (Reserve Bank of Australia) have commented that high household debt is one of the problems holding them back from raising interest rates and rising unemployment would also not help that.
An interest rate hike is generally seen as positive for a currency as it makes that currency more attractive to investors, the fact that the RBA are still quite a way off yet other central banks around the world, for example the U.S and U.K are raising rates has led to money coming out of Australian Dollars and into other currencies.
I have thought for quite some time now that the Australian Dollar could be in for a rocky period and this Turkish issue may be the moment that starts this trend off.
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