The Australian economy has slowed of late due to several contributing factors. A key factor influencing the health of the Australian economy is a slowdown in Chinese growth.
US China trade war impacting Australian dollar
Australia are very reliant on the Chinese purchasing its goods and services. The US China trade was is impacting Chinese growth and in turn it is hitting the Australian dollar. Until recently it looked as though that there could be an end to the trade war with reports suggesting talks had been progressing well and it was hopeful there could be a deal in place by the end of the month.
Trump has now changed his stance however due to his view that talks were not progressing fast enough. He stated on Twitter he intends to more than double current tariffs on the Chinese.
Australian dollar vs sterling
These concerns had caused the Australian dollar to weaken against the pound last week as rumours circulated that the Reserve Bank of Australia (RBA) could potentially lower interest rates.
Yesterday we saw the RBA Interest Rate decision and interest rates were kept on hold at 1.5%. This strengthened the Australian dollar and saw sterling lose some of the gains from last week.
In the build up to the decision GBP/AUD came very close to breaching 1.89, which proved to be a small window of opportunity for AUD buyers. There are contract options available to make sure you do not miss out on such opportunities. A Limit order allows you to set a target rate of exchange and should that rate of exchange become available 24hrs a day your currency will be automatically purchased. Please do get in touch if this is something of interest.
RBA Monetary Policy Statement
Following Tuesday’s interest rate decision, the Reserve Bank of Australia (RBA) release the RBA Monetary Policy Statement. This statement provides justification as to current monetary policy and can provide hints to future monetary policy. These statements are watched closely by investors looking to make a fast buck and due to this the statement can cause volatility on the market. I would expect a dovish tone due to the current economic problems down under.
If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 18yrs. Foreign Currency Direct PLC.