Australian dollar may see record low
Published on 17.01.2019 20:27

The Australian dollar held up remarkably well in today’s trading session considering a round of disappointing data but some say the strength won’t last for to long and there may be a bloodbath on the way

The latest Westpac consumer confidence survey hit the market at -4.7 percent which shows that consumer confidence is seriously waning and this is on top of the local property market which tumbled last year by double digits.

 "The falls follow volatile equity markets in December and early January, heightened media attention around the deteriorating housing market and some talk of lower official cash rates. Up until the January reading consumer sentiment was holding above its long term average. One of the transmission channels for dwelling price falls to the economy is through weaker consumer sentiment," says Joseph Capurso, a strategist at Commonwealth Bank of Australia.

Now the question is, will the Reserve Bank of Australia have the nerve to cut interest rates which some say is the only to breath some life back into the economy and attract business investment but at the same time will be a disaster for the Australian dollar. 

The economical problems in China are also adding to the woes and if this gets any worse some say the Aussie dollar could be headed for an all time low.

“The Aussie dollar is going to get absolutely crucified and could suffer a 25-30 per cent fall,” says Colin Harte, a London-based strategist for BNP Paribas Asset Management. 

“You could have a bloodbath, because the Reserve Bank of Australia could allow the currency to go lower, in order to attract funding and domestic inflation to ease the pain.” 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. 58% 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. 58% 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.