Australian Dollar Article List

The outlook for the Australian dollar (Currency:AUD) has deteriorated through Friday trade with analysts forecasting further declines.

A look at the spot markets shows:

The euro Australian dollar exchange rate is 1.12 pct higher at 1.3418.
The pound sterling to Australian dollar rate is 0.87 pct higher at 1.5633.
The Australian dollar to US dollar exchange rate is 0.8 pct lower at 0.9669.

(Please note: These are spot references - your bank will affix their own discretionary spread to the figure. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering you more currency. Please find out more here.)

"Sterling is still testing the upside against a vulnerable-looking AUD," says Richard Driver at Caxton FX, "GBP/AUD is back on the offensive trading up at 1.56, with further gains likely in the sessions ahead."

Goldman Sachs has weighed in with a recommendation to bet on further AUD-losses, stating that whilst an upturn in global growth in H2 2013 would ordinarily be good for the AUD, it won’t result in higher commodity prices due to plentiful supply, so the AUD will not benefit.

"For this and other reasons, like a diminished interest rate differential, we’d agree," says Driver.

Looking at the New Zealand dollar we note weak New Zealand trade balance data has added to pressure being felt by the NZD.

Live Charts and
Aus Exchange Rates


Exchange Rate
Forecasts 2013:


With China’s growth data disappointing this week and the US edging towards removing support for the US economy, the NZD has already felt the heat a little and a weak NZ trade balance figure added to this.

The data still revealed a surplus but it was much smaller than expected thanks to a significant monthly decline in exports.

The outlook for the Australian dollar against the euro remains poor - the EUR/AUD currency pair is on the march higher with 6 bullish events outstripping 2 bearish events.

The 20th of May saw the formation of a bearish RSI (Relative Strength Indicator) at 1.3137. The RSI is above 70 suggesting the currency pair's cruise higher could be over-heating. The implication here is that a pullback could be due. It's either that or this pair is now in a lasting uptrend.

The technical charts for GBP/AUD are more balanced - we see the bullish and bearish events evenly matched from a short-term perspective. The intermediate term charts (6 weeks to 9 months) also favours sterling against the Aussie with 5 bullish signals versus 2 bearish signals. What is more the last bearish signs were flashed up in mid February.

Elsewhere: BoE's Fisher makes his case for bond purchases

Paul Fisher, one of the British bank's rate-setters, has said in a speech today that he favours small additional amounts of bond purchases over time, but not a hard-to-manage commitment to longer-term stimulus like that of the US Federal Reserve.

"I don't think I want to get into the American position of saying it is indefinite and then stopping.

"I think the Americans are finding it a bit hard - as we have seen recently - to get out, because they have got this indefinite horizon.

"My view is that we should be doing a slow amount over a period of time. Twenty-five (billion pounds) over three months is a slow rate.

"That would be what you kick off with. And then you would stop when you thought conditions were looking a lot better."