The Australian dollar has been weakening against sterling as the market takes it dissatisfaction on the Trade Wars and Donald Trump’s comments over Christmas out on the Australian dollar. As a commodity based currency the Aussie dollar will rise and fall according to global attitudes to world trade.
Expectations are high that Donald Trump will continue to pose a threat to the global economy, and a series of comments and tweets of late have put pressure on the Australian dollar. Since the main focus of the Trade Wars is China and this is Australia’s biggest trading partner, the market is right to be spooked by the prospects ahead for 2019.
There is a growing expectation that 2019 will see the Trade Wars becoming more of an issue and that this would put more pressure on the Australian dollar. The RBA (Reserve Bank of Australia) have been discussing the possibility of raising interest rates but are openly concerned about the more global factors affecting their economy.
2019 is looking to be a potentially very turbulent year as there are mounting concerns over the global outlook on trade and also various political events too. Stock markets have been swinging quite wildly over the Festive Season, creating concern for investors who worry about which direction the global economy will now take.
Donald Trump seems to be at the root cause of most of the uncertainty, although paradoxically the Trade Wars are said to be very likely to hurt many of his core voters, affecting areas of the US which were most likely to vote Trump.
2019 will be a decisive year and it might be that the AUD loses further ground if the year sees more uncertainty over such issues. The RBA does not meet until February which means the market may well take its clues from other areas.
GBPAUD levels might well fund themselves over 1.80 in the New Year, however clients looking to buy AUD with GBP should note Brexit uncertainties could very easily destabilise the pair too.
If you’d like to discuss the factors likely to impact Australian dollar exchange rates into 2019, feel free to use the form below to ask a question. I’ll be happy to get in touch personally and discuss your enquiry.