On Tuesday, the Australian dollar underperformed against its major currency rivals after suffering multiple occasions of falling in market value in recent weeks. This latest poor performance is largely the result of the latest RBA (Reserve Bank of Australia) meeting. This latest RBA meeting discussed the position of the Australian dollar considering the latest international FOREX movements, with event the possibility of further rates cuts being put in motion.
Currently, the RBA is in the position of thinking that while further rates cuts are not necessary just yet, there may be cause for them in the near future if FOREX does not begin to shift more in favour of the Australian dollar. The domestic and international flow of information had a significant impact on the performance of the Australian dollar this week. Some of these pieces of information include the US/China negotiations and the incoming Brexit information.
AUD/USD has continued a fall back from its monthly high (At 0.6811), after Geng Shuang, the Foreign Ministry spokesperson for China, provided details surrounding what is called “Phase 1” of the trade deal between China and the United States. The negotiation is still in motion, and it is uncertain if it will bear any weight by the time it comes to tie the final knots. This is why the Australian dollar is in a position to potentially turn its luck around, in the position of potentially being elevated ahead of the APEC (Asia-Pacific Economic Cooperation) meeting set for November 15-16.
This is the plan as the IMF (International Monetary Fund) continues to cut its global growth forecast. As Australia’s largest trading partner, China is being predicted to grow by a notable 6.1% in 2019. Even so, the RBA maintains that it might take the position of being moved to the sidelines on November 5 (the scheduled next RBA meeting), after it made the decision to reduce the cash rate to an all-new low just this month. The silver lining in this circumstance is that the Australian economy is currently expected to be adding 15,000 jobs in September next year (according to Australia’s employment record).
As for where the Australian dollar is poised to sit next week, of course it is all still to be determined, but current projections indicate that unless the domestic and international news flow throughout FOREX bids better news heading into the next week in the FOREX market, the position is unlikely to change.
Australian dollar tipped for losses this week amid multiple issues
The financial reliance the world grapples with every other day can and does prove to be challenging. The FOREX (foreign exchange market) is one of those circumstances.
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