AUD/USD Exchange Rate Forecast to Tick Higher despite Damp Risk Appetite
Despite the fact that global stock price losses have provoked a significant reduction in trader risk-appetite, the Australian Dollar to US Dollar (AUD/USD) exchange rate ticked fractionally higher during Monday’s European session.
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Australian Dollar (AUD) Exchange Rate Forecast to Struggle on Risk-Off Trade
The Australian Dollar to US Dollar (AUD/USD) exchange rate was trending within a limited range towards the close of Monday’s European session.
In general the Australian Dollar softened versus its currency rivals overnight as global stock price volatility and low crude oil prices weighed on market sentiment. With a complete absence of domestic data to provoke changes, there is a high chance that the ‘Aussie’ (AUD) will hold a weak position throughout today’s Australasian session.
Thus far in 2016 volatility has been considerable. However, some analysts predict that volatility will calm down in the second-quarter:
‘I believe the second quarter of 2016 will be considerably less volatile than the first,’ said Tom Elliott, strategist at deVere Group. ‘The much-forecasted hard landing for the Chinese economy has failed to materialise . . . the US Federal Reserve is far more emollient in its forecasts for rate hikes than it was three months ago, while recent economic data suggest continuing stable economic growth in America.’
The Australian Dollar to US Dollar (AUD/USD) exchange rate was trending in the region of 0.7720 during Monday’s European session.
US Dollar (USD) Exchange Rates Predicted to Hold Weak Position ahead of FOMC Rate Decision
Amid expectations of long-term delays to a Federal Reserve benchmark interest rate hike, the US Dollar cooled versus a number of its major peers. This week will see the Federal Open Market Committee (FOMC) decide on policy outlook. Most analysts do not expect any changes to policy at this time, and some even fear yet more dovish analysis from Fed Chairwoman Janet Yellen.
Should Yellen reiterate the need to be highly cautious against the backdrop of external risks posed by the global economic slowdown, the US Dollar is likely to extend losses.
During Monday’s North American session the US Dollar extended losses after domestic data failed to impress. March’s New Home Sales was forecast to advance by 1.6% but the actual result unexpectedly contracted by -1.5%.
The Australian Dollar to US Dollar (AUD/USD) exchange rate dropped to a low of 0.7689 during Monday’s European session.
AUD/USD Exchange Rate Forecast to Strengthen ahead of US Durable Goods Orders
With a complete absence of Australian economic data today, the Australian Dollar exchange rate is likely to continue trending in response to changes in market sentiment.
However, the AUD/USD exchange rate is predicted to hold fractional gains, despite safe-haven demand, ahead of March’s US Durable Goods Orders. A positive result may give the US Dollar some near-term support, but gains are unlikely to be sustained with the FOMC rate decision due early on Thursday morning.
The Australian Dollar to US Dollar (AUD/USD) exchange rate reached a high of 0.7729 during Monday’s European session.