THE Aussie dollar has experienced its first stable week in a while after a roller coaster winter that saw numerous lows and swings. This is a welcome sign for the Aussie, and has provided investors and business analysts with an optimistic outlook.
The Aussie is now also set to be “fairly valued” at its US$93c rate, according to the CommSec Ipad Index and Economist’s Big Mac Index. These two Indexes are today’s modern purchasing power comparisons. They allow us to consider the fair value of everyday products worldwide. The information may surprise some who consider the Aussie dollar is still overvalued. Retailers will be sitting in the corner of the Reserve Bank and hoping for an interest rate cut ahead of the festive season. This will assist in reducing retailer costs along with helping consumers through lower mortgage and credit card rates. All in all the decision will be left up to the RBA, whose opinion remains that the Aussie is still overvalued.
The Aussie was helped along further by Chinese manufacturing data that exceeded analysts’ expectations. It saw Australia’s currency advance against 15 of its 16 major counterparts, thanks to the positive report. This will impact local commodity exports and favour both Chinese and Australian trade.
Looking ahead, some important data coming out of the US could well provide some insight into the Aussie’s push for parity against the Greenback. There are mixed expectations surrounding the data releases, with consumer confidence set to be lower than expected.
Composed by Anton van Teylingen
Exchange rates as of GMT 10:30 23 September 2013
GBP/AUD : 1.702
EUR/AUD : 1.433
USD/AUD : 1.061
NZD/AUD : 0.888
Note: The above exchange rates are based on “interbank” rates. If you want to transfer money to or from Australia then please register/login on our website, www.1stcontactforex.com, or call us on 0808 141 2335 for a live dealing rate. Make use of our Rate Notifier to send you alert when the Australian Dollar exchange rate reaches levels you are looking for.