Australian Dollar Exchange Rate Outlook: "We Hold An AUD Outperformance Bias"

Published: 20 Oct 2017 21:24 Forex

australian dollar exchange rate today

Australian Dollar (AUD) Slips on Private Capital Expenditure Contraction

The RBA left interest rates unchanged overnight, giving the Australian dollar exchange rate complex a boost against its currency peers.

Analsysts at Lloyds Bank favour a strong AUD in the near-term outlook:

"We have held an AUD outperformance bias for a number of weeks now and this only bolsters that view. Next resistance in AUDUSD lies at .7375/85, with support lying in the .7175/60 region."

Latest Australian Dollar/Pound Exchange Rates

On Thursday the Pound to British Pound exchange rate (GBP/GBP) converts at 1

The live inter-bank GBP-GBP spot rate is quoted as 1 today.

At time of writing the pound to euro exchange rate is quoted at 1.169.

The GBP to USD exchange rate converts at 1.262 today.

FX markets see the pound vs new zealand dollar exchange rate converting at 2.112.

Please note: the FX rates above, updated 28th Mar 2024, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.

AUD Expands on Gains in anticipation of a Hawkish RBA Meeting

Optimism continues to hold up the Australian Dollar exchange rate today as pundits await the latest domestic Manufacturing PMI and tonight’s Reserve Bank of Australia (RBA) interest rate decision.

The Aussie exchange rates have extended gains across the board on Monday, despite persistent weakness in commodity markets and a renewed sell-off in mining shares.

Weaker US data, with a slump in Pending Home Sales, has also boosted the antipodean currency, even though the odds of an imminent Fed interest rate rise remain high.

ADVERTISEMENT
foreign exchange rates

Aus Dollar Exchange Rate Now Uptrend despite Five-Month Low on Iron Ore

Worries over a strengthening US Dollar have seen the price of iron ore pushed to a five-month low on Monday morning, with other base metals equally languishing as commodity demand generally declines.

However, in spite of this, the Australian Dollar exchange rate has remained on an uptrend against rivals following stronger-than-expected domestic Private Sector Credit and Company Operating Profit reports.

With markets largely confident that the Reserve Bank of Australia (RBA) will not move to change interest rates at tomorrow’s final policy meeting of the year the ‘Aussie’ is likely to hold onto gains in the coming days.

Sentiment for the Australian Dollar rate complex generally softened after Australian Private Capital Expenditure was shown to have unexpectedly slumped in the third quarter, falling from -4.4 per cent to -9.2 per cent.

Suggesting that domestic businesses are not investing as heavily in productivity-increasing measures this weaker result rather dampened the impression of the Australian economy’s current state of health. As the chief analyst at FXStreet noted:

‘The Australian economic decline was led by a contraction in in business investments in the mining sector, as commodities prices have been plunging during the past few months on the back of China’s economic slowdown.’

With Chinese stocks having taken another hit on Friday commodity prices retreated once again to push the AUD exchange rates down further.

"The Reserve Bank Board meets next week on December 1. We are confident there will be no change in the overnight cash rate." - Westpac

As expectations are generally for the Reserve Bank of Australia (RBA) to hold steady on interest rates at Tuesday’s policy meeting, following Governor Glenn Stevens’ suggestion that policymakers ‘chill out’, the antipodean currency could be in line for a fresh rally in the coming days.

Pound to Australian Dollar: Pair Softens as UK Net Trade Falls to Eighteen Year Low

Friday’s finalised third quarter UK GDP did not do much to improve the outlook of the Pound as growth was confirmed to have slowed, keeping the GBP to AUD exchange rate on a downtrend.

Of particular concern to investors was the severe drag exerted on the economy by a record low trade gap, as imports in the quarter were found to have accelerated far ahead of exports.

Scepticism over the viability of George Osborne’s latest budget, reliant as it is on forecasted tax receipts, has also weighed heavily on the Pound (GBP) at the end of the week.

Underwhelming Greek GDP Fails to Keep EUR/AUD Exchange Rate on Downtrend

Sentiment towards the Euro (EUR) remained highly mixed on Friday as the prospect of imminent monetary loosening from the European Central Bank (ECB) increasingly played on the minds of traders.

Although Greece’s third quarter GDP fell short of expectations, showing a more severe contraction of -0.9% as opposed to the forecast -0.5%, the single currency nevertheless regained some of its buoyancy throughout the course of the day.

Consequently the EUR/AUD currency pair entered the weekend on an uptrend as investors continued to favour the common currency, despite concerns with the robustness of the Eurozone economy.

USD to AUD Exchange Rate Remains Bullish as Traders Continue to Bet on 2015 Fed Rate Hike

Despite a general lack of domestic data in the latter half of the week the US Dollar (USD) extended gains against rivals on Thursday and Friday, with the USD/AUD conversion rate on a strong uptrend.

The USD/AUD was boosted on the back of an unexpectedly strong Durable Goods Orders figure, which was seen to support the odds of the Federal Open Market Committee (FOMC) voting to raise interest rates in December.

While the Personal Consumption Expenditure Core was a little disappointing and the University of Michigan Confidence Index was revised downwards the general assessment seems to remain that the domestic economy is currently strong enough to support higher interest rates.

Advertisement

Save money on your currency transfers with TorFX, voted International Money Transfer Provider of the Year 2016 - 2022. Their goal is to connect clients with ultra competitive exchange rates and a uniquely dedicated service whether they choose to trade online or over the telephone. Find out more here.

Related News

Top Global FX Exchange Rate Forecasts - Latest Data Projections From Financial Institutions and Market Analysts

Euro to Dollar forecastPound to Euro forecastPound to Dollar forecastEuro to Pound forecastUS Dollar to Canadian Dollar forecastUS Dollar to Yen forecastAustralian Dollar to US Dollar forecast