Aussie dollar set to rebound
Published on 07.03.2019 19:14

The Australian dollar is set to rebound according to one analyst at the expense of the US dollar which is expected to weaken as the US Federal reserve holds off on raising interest rates any further.

Although the Australian economy has some problems of its own, this factor is not expected to outweigh issues in the US which should generate interest in the Aussie dollar and will be the catalyst for the rebound.

“A dovish US Federal Reserve, a likely global economic growth recovery in the second half of the year and thawing US-China trade tensions should outweigh domestic risks for Australia such as the worsening housing slump” said Julio Callegari from JPMorgan Asset Management

"We already saw a significant slowdown in the US, that's much more favorable to emerging market and the cyclical currencies." He added.

Another catalyst for the recent loses in the Australian dollar is the growing expectation that the Reserve Bank of Australia will need to cut interest rates this year in order to breathe some life into the economy, but some say this is not a done deal and if the jobs market holds up a rate cut may be delayed or not happen at all.

"The key issue for the RBA is the labor market and Lowe noted that the data on this front have been encouraging," says Elias Haddad, analyst from the Commonwealth Bank of Australia

"We don't expect the RBA to be too concerned about the soft Q4 GDP outturn as long as slower growth doesn't translate into slower employment growth." He added.

The material published in on this page is produced by the FIBO group companies, and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Andrew Masters

Analyst

The world of trading has no boundaries

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% of retail investor accounts lose money when trading CFDs with this broker. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

×

Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% of retail investor accounts lose money when trading CFDs with this broker. Before deciding to trade foreign exchange you should consider whether you understand how CFDs work, your investment objectives, your level of experience and readiness of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.

Important notice
By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.