Australian Dollar Faces What Might Well Be Its Toughest Week So Far

We live in a digital era where technological advancement is a prominent force. The world is becoming more conscious of not only the amount of data we put out but also what construes as sensitive information. Aside from that, we are becoming increasingly aware of what’s going on, fueling a generation of individuals who are, in Millennial-speak, “woke”. It basically means that this generation is being sensitive and aware of all the injustices in the world. This generation is also ridiculously obsessed with the digital landscape. From figuring out tax deductions, learning more about the latest average interest rates on reverse mortgages, and figuring out the foreign exchange market, everything is online now.

The Australian dollar in particular is one of the most interesting currencies to watch on the market because it fluctuates dramatically and has been struggling for stability - it has been keenly watched by forex brokers and industry experts. After a challenging year with more cuts than usual, the Australian dollar was predicted (or at least, hoped) to have a stronger start to the new decade. However, this has proven to not be the case as the Australian dollar faces what might well be its toughest week so far. From an active player’s point of view, the activity of the Australian dollar is making everyone nervous, especially since it is teetering from one extreme to the other but its saving grace lies in its ability to regain its balance relatively quickly after being knocked down by other currencies within the market.

According to records from just a few days ago, around 77.8% of traders in the market are net long AUD/USD. This figure has increased handsomely from the 45% that it stood at earlier this month. However, since that point in time, the Australian dollar has gone on to fall victim against the US dollar yet again, losing upwards of 4.2% in value. It is interesting to realise that the Australian dollar caved in to pressures in the form of selling from both the US dollar and the Japanese Yen. Overall, this has been a significantly underwhelming week for the Australian dollar, and there are vain hopes that the coming weeks will bring a rise in value despite having the odds stacked against it.

This is not the first low for the Australian dollar in 2020, but it is perhaps the toughest thus far. The Australian dollar has faced one of the more problematic beginnings to a new decade in the market, but that does not necessarily mean that the rest of the decade is going to follow suit - or even the rest of the year, for that matter. It goes without saying that the foreign exchange market is quite literally constantly shifting. In fact, the only constant in the foreign exchange market is change and what could start out unsteadily might just see the biggest increase over the next few months, depending on the economy, politics and country stability.