The AUD has taken another hit against the USD this week as the market wraps its head around which way the Federal Reserve will go at their upcoming policy meeting. The Aussie dollar also lost ground against the JPY, EUR, CAD, NZD and SGD, but in good news for Aussies heading to the UK, the ongoing Brexit drama in Britain has given the AUD a nice boost against the GBP.
There’s plenty going on around the world at the moment, but the star of the show and most important driver of foreign exchange markets and consumer sentiment this week will be the much anticipated Federal Reserve meeting later this week.
Today, 1 AUD will buy you:
AUD on edge as global currency catalysts line up for business
Despite trying admirably for a rally against the USD on Monday, the AUD has struggled for positive momentum against the Greenback, slipping back a few pips today. Despite the prospect of European Central Bank and Fed rate cuts taking some of the pressure off the AUD in the short term, the upcoming RBA meeting on 6th Aug and the following Statement on Monetary Policy on 9th Aug, combined with some cracks showing in iron ore markets appear to be keeping the AUD’s feet planted firmly on the ground for now.
Recent economic forecasts of inflation and unemployment also show the RBA are going to have a hell of a fight on their hands to bring levels into the Goldilocks zone, leading many to believe the rate cuts will keep on coming this year.
The AUD/USD especially remains under pressure although the AUD has some scope to recover some losses this week if we can produce higher than expected Q2 Australian inflation data tomorrow. Signs the consumer market is improving and growth is heading back in the right direction may be enough to claw some ground back.
As usual, the AUD is particularly sensitive to US/China trading and Chinese economic output and positive moves in that sphere might also give the Aussie dollar a much needed boost.
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