Investors who are placing bets that the Australian dollar will keep declining might want to think twice. Analysts anticipate a currency recovery due to Chinese stimulus measures and potential Reserve Bank of Australia rate hikes. However, a Bloomberg study of strategists and economists predicts that the Australian dollar will increase over the next few weeks, …
Investors who are placing bets that the Australian dollar will keep declining might want to think twice. Analysts anticipate a currency recovery due to Chinese stimulus measures and potential Reserve Bank of Australia rate hikes. However, a Bloomberg study of strategists and economists predicts that the Australian dollar will increase over the next few weeks, completing the year at 66 cents and hitting 68 cents by March. According to a second Bloomberg survey, the prognosis is improving as China takes steps to strengthen its economy and as the RBA may raise rates again by December. According to Simon Harvey, head of FX Analysis at Monex Europe in London, markets are currently undervaluing a likely RBA rate increase. If the 5% GDP objective appears unrealistic in the fourth quarter, Chinese officials are more likely to start implementing more direct stimulus, which would immediately increase risk sentiment, the analyst continued. If data released on September 14 reveals that Australia’s unemployment rate increased more than anticipated, the Aussie dollar may once again come under pressure since the weakening labor market may cause investors to lower their expectations for another RBA rate increase.
Risk Disclaimer:
Please note that this article does not offer any instructions or suggestions regarding investment decisions. Therefore, it is essential that you carefully evaluate your financial situation and conduct thorough analysis, or seek advice from a qualified professional, before making any investment decisions.
