It is no secret that the world around us is one that is becoming more digitally and technologically inclined all the time. Practically every aspect of life as we have known it has been and continues to be impacted.
The foreign exchange market that spans the globe is one that is constantly going through many ups and downs. In fact, the only constant in this market is that there are no constants. As a result, it comes as no surprise anyone familiar with the vanscape that in a split second everything can change. In many ways, this is the essence of how the market functions and thrives. And what we have noticed in the last year or so is that the extenuating circumstances that surround not only the foreign exchange market but the world have had a distinct and ongoing impact in how does able to function and thrive at any given time.
And this feeling has only become more potent in the last six months or ao. It has been a particularly chaotic time for the forex market in recent months. This is especially true for the Australian dollar. And it is truer again for the Australian dollar over the last week or so. The Australian dollar is renowned for being a financial innovator that for the most part functions and rise of relative ease and transparency. However, in recent months it has become obvious that not even the Australian dollar is able to ride this wave of uncertainty and chaos without overcome in its own challenges.
While the global equity of the Australian dollar is favourably strong, the evolving trade war between Australia and China is becoming exceedingly damaging. Think of the raging battle over industrial metals, for instance (i.e. one of Australia’s biggest major exports). The trade war between Australia and China has been ongoing for a few months now, however it has become exceedingly obvious that it is beginning to gain traction as time goes on. As a result, the uncertainty of Australia's capability to be able to continue to be a major exporter of industrial metal has definitely resulted in an impact on the Australian dollar itself.
One of the biggest things that has become exceeding the apparent in these last couple of weeks and especially last week is that this is very much just the start. But we have definitely seen times where the Australian dollar has fallen and then risen again and value, the difference between then and now is that this ongoing trade war between Australia and China is really just getting up now. And as a result, both currencies are experiencing and navigating no way through a chaotic time. The impact on the Australian dollar specifically is that there is no certain way to know just how it is going to continue to function and thrive in the coming months and even the coming years.
So, while the foreign exchange market definitely does go through many evolutions, the impact on the Australian dollar specifically is swift and ongoing. and the next couple of weeks especially are going to play a significant role in how the Australian dollar is able to continue to prove its value while also being willing and able to effectively in successfully maintain its position in an ever-evolving financial market around the globe. watch this space.
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