The Australian dollar (AUD) is currently enjoying a healthy rise in the market heading into this fresh decade this past week.
Following the 2019 currency market “flash-crash”, this is a promising turn of events that presents the opportunity for a stronger financial year for the Australian dollar in 2020. The current position of the Australian dollar has it reaching and even exceeding heights that have not been seen since July of 2019.
Of course, it is important to note that there are always several strategies in play in the forex calendar at any given time, and so there is no telling just how long we can expect this optimistic position of the Australian dollar to maintain its footing.
An important distinction to pay attention to here is the fact that nothing is certain in the foreign exchange market, least of all the position of a currency in the market. Given the recent speed of the soaring position of the Australian dollar in the market, it comes as no surprise that AUD appears to have recently been dramatically overbought. What this means is that the chances of lower interest rates have decreased to a point.
However, if inflation rises it is likely that the Australian dollar will find itself subjected to at least one more cut in the near future. The Reserve Bank of Australia is likely also concerned with the recent rise of the Australian dollar, which points to a possibility of the central bank fighting the market.
In what is honestly the only certainty in the forex market to begin with, the recent projections of the Australian dollar in the market pinpoint the fact that this is a market that, like it or not, is almost certainly unstable at the best of times, and downright unreliable at the worst of times (to say the least).
Nonetheless, the strong start of the Australian dollar heading into 2020 marks a positive beginning to this fresh decade for the Aussie currency. While it remains to be seen where the AUD foreign exchange rates are headed next, the powerful surge of the Australian dollar this last week signals the first (much-needed) rise in at least six months.
The Australian dollar has been notorious in the past for flaking out and then making a small but strong comeback. This latest movement of the Australian dollar is a testament to that disposition, as well as a warning signal not to get too comfortable with the current position of the Aussie dollar in the forex market.
Everything can change in the blink of an eye, and so the best that anyone can hope for going into the rest of this week (and the rest of this fresh decade or new year, for that matter) is that the Australian dollar holds its position as one of the strongest performing currencies in the forex market, as often as possible. At the end of the day, that is the best that any of us can hope for, no matter the currency in question.
Comments
Log in or sign up to join the conversation.