Australian Dollar US Dollar (AUD/USD) Exchange Rate Stays Afloat despite Gloomy Outlook on Australian Economy

Australian Dollars (AUD)

The value of the Australian Dollar has been relatively low of late, with the continuing lack of resolution for the election doing little to improve the mood of investors.

The US Dollar has similarly declined on the whole, on account of the prospect of a Fed rate hike getting further away with every release from the central bank.

Australian Economic News: Election Deadlock Continues, Negative AAA Credit Rating Outlook Weakens AUD

The Australian Dollar has been in a sorry state lately, having dipped against most of its peers due to continuing concerns about the future state of the economy against the backdrop of a stagnant election outcome.

The latest news has been that the Coalition have once again edged closer to an overall majority, though as the waning confidence in the ‘Aussie’ has shown, investors are getting impatient for a resumption of ‘business as usual’.

Another major source of damage for the Australian Dollar has been the decision by Standard and Poor’s to lower the outlook on Australia’s AAA credit rating, from stable to negative.

In reference to the decision, S&P said:

‘The negative outlook on Australia reflects our view that prospects for improvements in budgetary performance have weakened following the recent election outcome’.

US Dollar Dips as Odds of Fed Rate Hike Fade with Release of Minutes

The perceived value of the US Dollar has been low of late, due in part to the revelations of the Federal Reserve’s June minutes for its untouched interest rate decision.

As a number of speculators had forecast, the central bank linked its lack of a rate hike last month with concerns about the outcome of the EU Referendum. As the UK voted for the more instability-linked ‘Brexit’, the odds of a US rate hike in the near-term are very slim indeed.

Despite Fed officials including Chair Janet Yellen stating earlier in the year that at least two interest rate hikes were likely, the mainly dovish attitudes of Fed officials post-‘Brexit’ has resulted in many economists pushing their predictions for a rate increase all the way ahead to 2017 at the earliest.

US Dollars (USD)

AUD, USD Exchange Rate Forecast: US Payrolls and Unemployment Results Incoming

No further Australian economic announcements are expected this week, therefore the next influence to be had on the pairing is set to come from the US.

Tonight will see the release of the June non-farm payrolls result, as well as the unemployment rate for the same month.

With payrolls, a rise from 38k to 170k is expected, while the unemployment rate is pessimistically expected to rise from 4.74% to 4.8%.

Recent AUD, USD Exchange Rates

The Australian Dollar to US Dollar (AUD/USD) exchange rate has been trending in the region of 0.7519 and the US Dollar to Australian Dollar (USD/AUD) exchange rate has been trending in the region of 1.3303 recently.


Oliver has developed an expert understanding of the Forex market and the main drivers behind currency movement since entering the financial sector. He writes daily articles covering the latest shifts in currency for a range of sources online, as well as providing potential forecasts of future movement. This gives his followers all the information they require to protect their international money transfers from market exposure and currency risk. - View all posts by Oliver Meredew

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