AUD/USD Exchange Rate Forecast: Australian Dollar Trends Higher Today before US Confidence Data

  • Posted on

United States Dollar (USD)

The Australian Dollar to US Dollar (AUD/USD) exchange rate has spent much of the week trending around and beyond a 4-year low as a result of falling commodity prices, a bullish US Dollar and RBA interest rate cut speculation.

During the North American session the Australian Dollar to US Dollar (AUD/USD) exchange rate weakened as a result of the US publishing unexpectedly strong retail sales figures.

Australian Dollar to US Dollar (AUD/USD) Exchange Rate Struggles after Retail Sales

The US Dollar’s uptrend wasn’t spectacular, but the currency still gained against peers like the ‘Aussie’. Other factors also weighed on the Australian Dollar.

According to industry expert Stephen Innes; ‘The Aussie fell from the A$0.8275 New York close to its current level just below $0.8250. The AUD came under fire early in the overnight European session after Reserve Bank of Australia board member John Edwards told the Wall Street Journal Australia’s economy won’t grow strongly enough next year to prevent a further rise in unemployment. That means the RBA’s interest rates will need to remain low. Edwards clearly believes the Australian economy won’t have the strength to stand on its own in 2015 without support from the RBA and the government.’

AUD/USD Exchange Rate Recoups Losses after RBA Dismisses Rate Cut Speculation

Comments issued by Reserve Bank of Australia Governor Glenn Stevens caused extensive Australian Dollar movement overnight.

The commodity-driven currency initially plummeted against the majority of its counterparts in response to the RBA’s insinuation that the Australian Dollar will fall further next year.

However, as Stevens also downplayed expectations of a rate cut from the central bank, the Australian Dollar went on to recover lost ground.

Stevens commented; ‘I don’t want to say that there are no circumstances in which we would consider further changes in the interest rate. I think that has to remain an open question. But we’re certainly reaching levels where, for those who have interest rates as their income, the income effect on them is clearly quite something to be thought about.’

During Friday’s European session the Australian Dollar to US Dollar (AUD/USD) exchange rate gained by almost 0.4%.

Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast

The Australian Dollar to US Dollar (AUD/USD) exchange rate could pare gains in the hours ahead if the US University of Michigan Confidence Index shows the improvement in sentiment forecast by economists.

The confidence index is expected to climb from 88.8 in November to a preliminary reading of 89.5 in December. Such a strong result would lend support to the US Dollar.

Investors will also be looking ahead to next week, and the publication of the RBA meeting minutes.

The Australian Dollar to US Dollar (AUD/USD) exchange rate was trading in the region of 0.8279 during the European session.

« Previous Story

AUD/USD Exchange Rate Advances, Employment Stats Forecast to Cause Australian Dollar Movement

Next Story »

AUD/USD Exchange Rate Forecast: Australian Dollar Falls by 0.4% after US Industrial Production Data


Disclaimer: Currency-Converter.com.au and its data provider, TorFX, make no claims regarding the validity or exactness of the information provided in on this site and will not be held liable for any use, interpretation, or other implementation of the information provided. Currency-converter.com.au make no warranties, express or implied, as to results to be obtained from use of such information, and make no express or implied warranties of condition, quality, performance, merchantability or fitness for a particular purpose or use. Currency-converter.com.au shall not have any liability for the accuracy of the information contained in the services provided or ommissions there in which are made available on a free, as-is basis. None of the aforementioned parties shall be liable for any third party claims or losses of any nature, including, but not limited to, lost profits, punitive, consequential, special, incidental, indirect or similar damages even if advised of the possibility of such damages. Rates offered are interbank rates and may not be the same as offered by your financial institution, and do not include commissions. Rates shown on this site will vary from those provided by TorFX or other providers linked to from this site.