Overnight, a risk-averse mood prevailed in the markets, which led to the Aussie dollar falling from 0.7320 to 0.7278 against the USD.
This mood is bolstered by news of the trade war between China and the US intensifying, alongside continued uncertainty around Brexit in the UK. With this in mind, the GBP is being weighed down by Brexit negotiations, and the AUD is feeling the influence of strains on the Chinese economy and CNY.
Last week the AUD strengthened slightly off the back of news that the tensions between the US and China were easing. However, reports from the Asian Pacific Economic Cooperation (APEC) Summit in Papua New Guinea last week seem to challenge this notion, with President Trump and Chinese President Xi Jinping struggling to agree on a number of things in heated debates.
Since the APEC Summit, it seems the trade talks have once again broken down, with Trump threatening more tariffs on Chinese exports into the States. This has put a dampener on the upward momentum we saw in the Aussie dollar last week, as any negative impact on the Chinese economy can see flow on effects on the Aussie dollar.
It’s not all bad news for travellers though. Despite not being in tip top shape against the USD, weakness in the pound is increasing the amount of spending money Aussies can take to the UK, with it currently sitting around the 0.57 mark, up from 0.54 this time last month. When exchanging $2000AUD, this increase equates to a bonus 60 pound spending money - yes please.
If you are travelling soon and need some foreign currency for your adventure, we recommend keeping an eye on the news to see how the AUD is performing so you know when to purchase and make the most of your travel money.
Alternatively, if you are travelling soon, why not add Rate Guard to your transaction in store. It’s free, and if the rate changes within 14 days we will refund you the difference*.
Definitions for those of us playing at home:
Risk Sentiment (Risk-averse mood)
This refers to changes in investment activity based on the level of risk tolerance in the market. If the risk is perceived to be low (risk-on) the theory states that investors are more willing to engage in higher-risk investments. Likewise, when the risk is perceived to be high (risk-off), investors will seek lower-risk investments.
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All rates quoted are market rate, which may not be available to the general public.
*Terms and conditions apply to Rate Guard. See https://www.travelmoneyoz.com/rate-guard for more information.