The foreign exchange market is arguably the most valuable market place in the world. This has always been the way and it always will be. Over the years, we have seen the foreign exchange market go through many ups and downs. However, it is also unwaveringly true that the current unprecedented circumstances are among, if not the, most catastrophic circumstances that the foreign exchange market has faced in decades. The coronavirus pandemic that has been wreaking havoc around the globe for the last eight months has proven itself to be immensely challenging (to say the least).
The entire foreign exchange market (in addition to the rest of the world right now, of course) has found itself in a position where it is facing more ups and downs than usual. The Australian dollar is of course just one currency that is available on the foreign exchange market, however this is a form of currency that has been through an immense wave of challenges.
After having faced many challenges over the last few months, the Australian dollar has finally found itself in a position of ready strength. Essentially, what this means is that while the Australian dollar is not exactly at its most valuable right now, it is most certainly more valuable than it has been in recent months. The Australian dollar has reached a surprisingly strong value against the US dollar over the last week. So, after a decidedly tough month, the Australian dollar is seemingly finding its way out to the other side. However, what we are going to have to come to the realisation of is that the Australian dollar is currently operating on strong standards, however this does not mean that this trend will continue.
The Australian dollar has been re-evaluated many times since the beginning of the current pandemic. And while the RBA has made a continuous effort to strengthen the dollar, the relative ease and transparency it has taken up until this point for any of those efforts to build even remotely positive results past the point of a few hours has been monumental Now, however, what we are currently seeing is that the Australian dollar seems to be teetering on the high end of the spectrum, which leaves it in a position of strength overall this week. Even so, we are likely to continue to see ebbs and flows in the value of the Australian dollar in the coming weeks (and even - and especially - in the coming months).
The reality is that while the coronavirus continues to play out around the globe, there is no way of knowing (or even remotely having a realistic and fundamental understanding of) how any currency is going to perform in the near future. All we can do is continue to support our economy and strengthen the Australian dollar from within the borders of the country. Going forward, we are likely to see the Australian dollar rise to new heights and then back down to some known lows while it continues to find its footing in these unprecedented, unstable, and uncomfortable circumstances.
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