In recent months, the world around us has changed in significant and not always entirely positive ways. The ongoing COVID-19 pandemic has essentially forced life as we know it into temporary lock down, with corresponding industries struggling to maintain their footing in what has been an entirely unstable time (to say the least). Of course, there have been some industries that have positively flourished during these times.
And then of course there are the industries and aspects of life that have been challenged tremendously. The foreign exchange market is one such industry that unfortunately has been through more than its fair share of trials and tribulations in recent times, thanks largely to the ongoing impact of the pandemic and all that it has thrown up in the air. Take the current value of the Australian dollar, for instance. Usually quite a consistent and strong performing currency, the Australian dollar has faced a rough year so far. And what is more is that it seems to be a rough year that just keeps on dishing out instability and uncertainty going forth.
This last week has proven to be yet another challenging week for the Australian dollar (and many other international currencies, for that matter), as it faces flat trading against the US dollar and other currencies, effectively putting it into yet another uninspiring week of value for existing and prospective investors alike. Trading up only against the NZ dollar over this last week (and barely, at that), the Australian dollar is going through a drought as far as being able to be considered a currency with high value. There are many reasons why this is, however one of the most important reasons to take note of is the fact that while the world is essentially still in lockdown, so is the trading market.
Because Australia is essentially an island nation, the fact that we are doing quite well in comparison to other countries around the globe with getting the pandemic under control on our own home soul does not make much of a difference, because other nations are indeed struggling and simply cannot afford to be investing in trade goods from countries like Australia if they are not able to gain value and trade in return. This, coupled with other defining factors, has essentially resulted in the Australian economy and the Australian dollar taking a definitive dive in recent weeks - a dive that, at this point in time, is unfortunately showing no signs of tipping upward any time soon.
Having said that, it only takes an hour or so for the foreign exchange market’s value rate to do a complete 180, so there is no telling just how quickly this downward trend in the Australian dollar’s value on the foreign exchange market will flip around. Time will tell.
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