This Week’s Australian Dollar Exchange Rates:
Pound Sterling to Australian Dollar (GBP/AUD) –
Week’s High: 1.7720
Week’s Low: 1.7270
US Dollar to Australian Dollar (USD/AUD) –
Week’s High: 1.3424
Week’s Low: 1.2936
Euro to Australian Dollar (EUR/AUD) –
Week’s High: 1.5086
Week’s Low: 1.4587
New Zealand Dollar to Australian Dollar (NZD/AUD)
Week’s High: 0.9749
Week’s Low: 0.9645
Australian Dollar Weighed Down by Rising Risk Aversion
Unsurprisingly as the Federal Reserve’s September policy decision draws closer, markets have been inclined to speculate over the possibility of a 2016 interest rate hike. As signs from the world’s largest economy have been mixed the odds of an imminent move have remained relatively high, something that has weighed heavily on the ‘Aussie’.
While the latest raft of Chinese data proved generally positive, this failed to shore up the Australian Dollar, with risk aversion continuing to dominate the first half of the week. Iron ore and copper prices remained under pressure thanks to the strength of the US Dollar, with both pushed to their lowest levels since the end of June.
However, signs from the Australian economy were somewhat more positive. Both the NAB Business Confidence Index and the Westpac Consumer Confidence Index showed an uptick on the month, indicating that domestic sentiment remains robust. Even so the antipodean currency continued to struggle against many of the majors as a cautious outlook prevailed.
RBA Meeting Minutes Could Boost ‘Aussie’ Appeal
Investors will be interested to see the minutes of the Reserve Bank of Australia’s (RBA) September policy meeting, which could offer a greater clue as to the likelihood of further monetary loosening. If policymakers are found to have expressed more dovish opinions during the meeting then the appeal of the ‘Aussie’ is likely to diminish. On the other hand, if the RBA seems less inclined to cut interest rates in the near future then AUD exchange rates could receive a strong boost.
Heavy market focus will be on the Fed’s latest policy meeting, with the Australian Dollar expected to weaken if greater hawkishness is on display from the Federal Open Market Committee (FOMC). An imminent rate hike could encourage the RBA to ease sooner and would dent commodity prices. However, investors do not expect any particular change at this juncture, which could see the antipodean currency making fresh gains on increased risk appetite.