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Economic Outlook: Impact on the Australian Dollar in 2014

Learn about the potential influences on the Australian dollar in 2014. Factors such as US interest rates, China's market reform, and the Australian economy could affect the currency's strength. Stay informed to protect against a weaker Australian dollar.

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Economic Outlook: Impact on the Australian Dollar in 2014

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  1. The Australian Dollar 1. US Interest Rates The Fed has kept US interest rates low by buying $85bn of bonds every month. Although delayed by debt ceiling discussions & government closure, this support might start to be withdrawn in 2014. If so, US interest rates are likely to increase, driving the USD up against other currencies. 2. China & Commodities China is undertaking market reform to control a credit boom & avert a property bubble. Growth in China has slowed; the longest period below 8% for 20 years. Commodity prices have fallen sharply since mid-2011 & any further price falls could be reflected in a weaker Australian dollar. 3. Australian Economy The federal election has provided a boost to confidence, however it remains to be seen whether the economy can adjust to any slowdown in mining investment. AUD interest rates have been falling, but seem to have stabilised for now. Any more cuts would weaken the Australian dollar. AJSS Conclusion: Protect against the possibility of a weaker Australian dollar in 2014.

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