Compass Global Markets' Blog

Market Update - 22nd December 2016 - A Look Back At AUD/USD During 2016 & What Might Happen In 2017...

Posted by Patrick Downes on December 22, 2016 at 9:09 AM

We're 3 days out from Christmas and 10 days out from 2017...so looking back on the last year we're reminded that the Aussie dollar has a tendency to move around much like a yo yo. In fact, over the course of 2016 the so called "Aussie" has dipped as low as 68.27US cents in mid-January and climbed as high as 78.35US cents in mid-April. We opened 2016 at just on 0.7300 and it's looking very likely that the Aussie dollar will finish 2016 in much the same place.

So where to for the Aussie in 2017? Well, if I knew the answer to that question i'd have no reason to work nor would all the talking heads on the TV who provide bold and often wrong predictions on where currency markets, commodities and equities are going. The difficulty when trying to predict the future is that its just that, you're trying to predict something which has not yet happened and with infinite variables.

Having said that, you can have a basic idea where AUD might be headed based on interest rate expectations and so forth. So with the U.S raising rates this month and talk of further interest rate hikes in 2017 along with a growing U.S economy you'd have to suspect that means continued US dollar strength which of course doesn't bode well for the AUD/USD cross particularly given Aussie economic indicators are still just barely moving. Good luck and call me if you'd like to talk more about hedging your foreign currency exposures into 2017.

DATA RELEASES TODAY:

USD - GDP & Core Durable Goods Orders at 12.30am

AUD EXCHANGE RATES:

AUD/USD – 0.7235

AUD/GBP – 0.5857

AUD/EUR – 0.6937

AUD/NZD – 1.0485

AUD/JPY – 85.014

***Above rates are indicative wholesale rates and intended as a guide only***

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Patrick Downes

Senior Corporate FX Dealer

Compass Markets

Phone Patrick - 0431 278 632 

  Email Patrick: patrick@compassmarkets.com

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