Australian dollar falls back towards 2 year low
Published on 06.09.2018 09:39

The Australian dollar has failed to capitalize today after a solid round of economic data which points to ominous signs for the currency as the year closes out.

Data out yesterday showed GDP figures in Australia currently sitting at 3.4 percent which were well above analysts’ expectations for a figure of 2.8 percent.

Shortly after the news was released the Aussie dollar bounced off a 2 year low back up through the US72c mark before giving up most of the gains as investors focused back on the main recent events that have been driving the Aussie dollar which is more global.

Events such as the trade wars between China and the US as well as Brexit among other things have been putting immense pressure on emerging markets and in particular the Australian dollar which is itself part of this group.

Although the Aussie dollar remained flat after the latest round of GDP figures, some say that the positive figures may eventually feed in to higher inflation which will force the Reserve bank of Australia to lift interest rates sooner or later.

"The RBA had stuck to its view that a rate hike was a long way off yet, despite the fact that the economy is moving in the right direction, as today’s data confirms. That makes it clear that AUD strength will arrive later than we had envisaged, but it will arrive. said Esther Maria Reichelt, an analyst at Commerzbank.

“The longer the aussie remains at the current weak levels the more this supports the Australian economy which will lower unemployment further and fuel wage inflation sooner or later. As soon as that emerges the RBA will consider rate hikes"

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. 66% 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. 66% 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.