Australian Investment Blog

What now for the Aussie Dollar? Good Morning everyone Overview We’ve called the Aussie Dollar higher from significantly lower levels as the US pushed back on rate hike expectations and the overheated – overcrowded – long US Dollar trade took some time to unwind. We targeted the 75c range from under 70c and we’ve now punched through that level to trade at 76.72c. Clearly, after such a big rally, it gets more difficult to predict the next likely move – however – we’re in the business of having a view – and presenting it – so, here it is… Factors driving the currency - Firstly, the AUD is a small cork in a global ocean of currency flows and its moves are dictated by global macro factors as much as the strength or otherwise of our local economy and interest rate settings (& rhetoric of our central bank). - The USD rallied more than 12% versus the Aussie in 2015 and from the start of 2014 the USD has rallied more than 23% v the AUD. Obviously the USD has rallied strongly against many major currencies and to track that, we look at the US Dollar Index. The U.S. Dollar Index measures of the value of the U.S.
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