The Australian dollar is holding up well despite global fears of a
recession
Carry trade unwinding (the selling of high yielding assets such as the
Australian dollar) and dramatic events across global markets have failed
to push the Australian dollar down significantly. Richard Grace senior
currency strategist at Commonwealth Bank believes strong growth
fundamentals in Australia have kept any possible dollar weakening in
check.
"I think the Aussie has held up quite well actually, and it comes back
to my thinking that the nexus between equities and Aussie is continuing
to weaken. Although it's not completely severed, it certainly is
weakening ... currencies are moving more towards domestic fundamentals
which at the moment are very strong in Australia's case."
This allied to continued weakness in Sterling and the US Dollar as fears
of recession continue to put pressure on the US and UK markets. It
may be a prudent time to lock in any Australian dollar purchases now.
A large Australian trade deficient did little to stop the relentless
drive of the Australian Dollar against Sterling. This is more systemic
weakness in Sterling rather than overwhelming Aussie dollar strength.
AUD / USD still holds at 0.89 while GBP/AUD has risen to 2.2260.
The Australian economy still seems to whether the global credit squeeze
and slowdown; however, the high interest rates and prospect of further
hikes could see that stifle growth in the future.
The Aussie dollar gained in strength yesterday as housing data came out
stronger than expected. This may prolong the interest rate rise cycle
and a rate rise to 7% may be looming. Allied to another strong rally in
gold and commodities has seen the AUD move higher. Interestingly the
Financial Times ran an article yesterday citing a fundamental shift in
the value of the Aussie. "It is crucial to recognize that Australian
dollar strength is a function of a long-term historical price shift
lower in the US dollar, and at the same time the ascendancy of China and
the Asian region toward becoming the world’s dominant economic region.
The Australian dollar is permanently revaluing toward parity to the once
mighty, but now fallen, US dollar."
An interest rate decision by the Bank of England tomorrow may give the
pound some much needed relief. In the medium term the Pound will
continue to struggle.
Sterling suffers against all currencies, Auatralian Dollar soars to
2.23.
Selling sterling has become a one way bet as traders and analysts deem
the risks of UK recession to be high.
House price falls, a widening deficit, a likely BOE rate cut next week
and a very large and very vulnerable financial sector has seen an
enormous outflow of Sterling as traders seek safer bets. Conversely, the
Aussie economy keeps ticking over in spite of recent interest rate
hikes. Domestic demand has yet to show signs of weakening in Australia
and this has kept the Australian Dollar well supported.
Spanish Mortgages
Spain with Olg
For the very best rate Spanish mortgages contact Olg mortgage
specialists. For more information on a mortgage in Spain click the
following link: Best rate
Spanish Mortgages Spain100 % Mortgage rates from
just 3.9%
1. Unbeatable exchange rates On Pounds to
Australian
Dollars
Transactions
2. No commissions
3. FREE transfers over £5,000
4. Guaranteed secure transactions
5. Same day swift clearing of funds
6. Your personal senior FX broker
Fill out the form for
further rates information
"We will attempt to beat any
Pounds to Australian Dollars rate quote"
