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Australian Dollar and Euro Heading Higher, Experts Say

Weakness in the Australian dollar since Friday is to be short-lived, experts at National Australia Bank have said. A rally in AUD/USD to 0.74 is on the cards, as are politically-driven moves in EUR/GBP and EUR/CHF towards 0.92 and 1.2.

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The Australian dollar’s recent rally away from long-term lows is set to continue, National Australia Bank’s Ray Attrill has told the Australian Financial Review, with the stage set for an imminent move to US$0.74—a price not seen since August.

The Aussie traded above $US0.73 on Thursday and Friday of last week, reaching as high as US$0.7338, before weakening on Monday and Tuesday to levels in the low US$0.72s.

Despite this week’s slide, the Aussie remains nearly 3 percent higher against the US dollar than its October lows. At £0.565, it’s nearly 6 percent higher against sterling, and is nearly 4 percent higher against the euro and yen, at respective exchange rates of €0.635 and ¥81.39.

The Australian dollar might ordinarily be under pressure, what with the recent plunge in commodities prices and with global political risks occupying headlines.

Traders, though, are choosing to focus on domestic economic data, which remains solid, certainly in comparison with that coming from other parts of the world. Last week’s Australian employment report, for example, was described as “stellar all round” by RBC strategist Su Lin Ong.

Like the Australian dollar, the euro will head higher, per researchers at Danske Bank and Nordea Markets.

Relative to the British pound, an imminent euro rally towards £0.9 is on the cards, thinks Nordea’s Andreas Steno Larson, with potential for £0.92—3.5 percent higher than Tuesday evening’s quote of £0.889.

Larson, who considers British Prime Minister Theresa May “doomed,” believes that investors should be far more pessimistic on the pound, what with the “full risk of a new Brexiteer-Prime Minister yet to be priced in.”

The Swiss franc, too, is set to lose out against the euro, which will gain 6 percent to buy Fr1.2 sometime within the next 12 months, per the team at Danske Bank. This is, however, dependent on an “absence of new political risks” and comes with a caveat for a potential short-term dip towards Fr1.10.

When last seen on Tuesday, a little after 8pm in London, EUR/CHF was trading near 7-week lows at Fr1.131.


Further Reading


AUD/GBP Between a Rock and a Hard Place – USD Strength


Both the Australian dollar and British pound sterling have had a hard time of late caught between the rock of the China/US trade war and the Brexit hard place.

Last update: 13 Aug, 2019

Australia Cuts Interest Rates to Record Low

RBA Australian dollar AUD currency news and forecasts

The RBA has cut Australian interest rates to a record low of 1 percent in an effort to boost inflation. The Australian dollar is slightly stronger following the widely expected decision but is expected to lose 5–7 percent of its value before year-end.

Last update: 14 Aug, 2019

GBP’s Bright Start to the Year Is a Distant Memory

The British pound was the worst-performing major currency in the April-June period and remains “impossible to forecast” amid a Tory leadership battle that might force “no deal” or a general election.

Last update: 30 Jun, 2019


Posted to: News

Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.

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