We live in a world where money can buy us nearly anything the heart desires.. In Australia, the reality of this is being felt more than it has in years, as the value of AUD in the foreign exchange market tumbles for the second consecutive week. It has been a trying time for the Australian dollar, performing at its worst in years, under the weight of new rulings direct from the RBA and less-than-inspiring job creation statistics in the nation.
It has been a decidedly trying time for the nation, and according to this past week’s status updates on the Australian dollar itself, it has led to the most dramatic impact on the Australian currency in years. However, there is hope for a saving grace. In the coming weeks, it is expected that this recent influx of weak performance in the foreign exchange market may hinder. The reason? The market focus on the Australian dollar has been refocusing elsewhere as the reality of the current state of the Aussie dollar sinks in.
In recent weeks, the Reserve Bank of Australia made the decision to approve the first rate cuts in two years, citing the necessity of cuts to keep the balance and hopefully bring the Australian dollar back to new heights in the coming months following this first rate cut of the year. At this rate, the hope is dwindling on the assumption that the investor market will pull their attention to more seemingly lucrative investments – at least, in the meantime, until the Australian dollar can land back on its feet.
While many were surprised and even angry with the rate cuts, what many were not expecting was that this decision is likely not a one-off, but the first in a series of three-point rate cut decisions, set to right the ship and bring the Australian dollar back to its former glory. Some argue that these cuts were inevitable, while others insist they were not necessary, and may in fact do more damage than good. Only time will tell which way the results tumble, but one thing is certain: there is nowhere to go for the Australian dollar in the coming weeks, but anywhere.
With no certainty and no indication either way of how the fallout from the rate cuts will continue to ripple outward, all we can do is wait and watch the market – and the Australian dollar specifically – and how it moves onward. The Australian dollar has been in unbalanced territory in recent weeks, with the RBA (Reserve Bank of Australia), but there is a newfound rain of hope on the horizon, in the form of domestic expectations that global investors will leave the Australian dollar to its current status.
The hope is that investors will instead be focusing their attention elsewhere to more seemingly promising fronts on the foreign exchange market. However, that hope is almost certainly to be short-lived. All indications point to another dip in AUD, as job disappointments sent in and solidify further concerns surrounding the stability of the Australian dollar.
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