Australian Dollar to US Dollar Exchange Rate Forecast to Hit Six-Year Low with Imminent FOMC, RBA Interest Rate Decisions

  • Posted on

One Hundred United States Dollars (USD)

An increasingly strong ‘Greenback’ (USD) continues to dominate the softening Australian Dollar (AUD) ahead of the US interest rate decision as the AUD/USD pairing remains near six-year lows.

Commodity Crisis and Beijing Stock Pledge Cause Fluctuation for AUD/USD Exchange Rate, ‘Buck’ (USD) Up on Durable Goods

Turbulent times abound for the ‘Aussie’ (AUD) as the global commodity market has continued to slow over the last week with no significant signs of improvement on the horizon. Friday’s manufacturing PMI report from China, which came in at a disappointing 48.2 instead of the forecast 49.7, has hit all of the major commodity currencies hard. This lack of Chinese demand for imports sent the prices of minerals such as gold, copper and zinc plummeting to fresh lows. However, with stocks having fallen on Monday to levels not seen since 2007, Beijing pledged to intervene, prompting a resurgence that sent the AUD/USD exchange rate pairing climbing to a peak of 0.7321.

For the US a positive result came out of the Durable Goods Order report on Monday, with an increase of 3.4% rather than the expected 3.2%. The figure provided another boost to the ‘Greenback’ and prompted the AUD/USD pairing to begin shedding value once again by the end of the day.

Disappointment of Consumer Confidence Sees US Dollar (USD) Drop, Traders Begin to Hedge for Upcoming Rate Decisions

In the early hours of the morning the Consumer Confidence figure for the US was released, showcasing an unexpected shortfall as the index fell from 99.8 to 90.9. It would appear that American consumers have not been sharing the optimism of traders, which caused the AUD/USD pairing to continue trending upwards to a daily peak of 0.7347.

Ahead of next week’s interest rate decision Reserve Bank of Australia (RBA) governor Glenn Stevens will be giving a speech later today that is likely to influence trading. Albeit unlikely, if an imminent rise from the current record-low rate of 2% is indicated to be on the cards there could be a significant upsurge in value for the ‘Aussie’. Pundits predict that the talk may be of cuts rather than hikes, however, which seems unlikely to offer any grounds for a rally by the currency.

Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast: Slump Likely on Hawkish Outlook from Federal Open Market Committee (FOMC)

July’s rate decision from the Federal Open Market Committee (FOMC) in the US will without a doubt be the cause of some serious exchange rate movement. Although an interest rate hike is highly unlikely this month, the policy statement could well prompt a rally if it offers any indications of an imminent rise. The ‘Buck’ will likely be seeing further bullish trading once the statement is issued, unless policymakers imply that interest rates will remain static for the near future.

But with Monday seeing the release of the Reserve Bank of Australia’s (RBA) corresponding interest rate decision, and employment figures due out later in the week, the ‘Aussie’ may be able to recover some of its losses. Should there be rate cuts, however, it is likely that the currency will find itself softening still further across the board.

At time of writing today the AUD/USD exchange rate was in the region of 0.7323.

« Previous Story

Australian Dollar Exchange Rate Outlook: AUD/GBP, AUD/USD Trending Lower after IMF Remarks

Next Story »

Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast: ‘Aussie’ Collapses after FOMC Minutes Broadly Support ‘Greenback’


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.