Aussie dollar to rise?
Despite Europe’s search for alternatives, the Australian dollar may rise: Top trade opportunities
Industrial production in key European countries is rising, which may cause the euro to strengthen against other currencies. However, as Australia’s major trading partner and a resource-rich nation with a weak currency that is pegged to the US dollar, Australia’s industries are set to benefit from any potential increase in demand.
“As previously predicted, the U.S. is increasing its economic and military presence in Asia- Pacific with the aim of securing access to raw materials like energy and food supplies,” said Edward Huang, chief executive of First Sound Capital. “In addition to these factors driving tensions between China and its neighbors on the economic front, there is another major variable that will have a significant impact on markets; namely Brexit.”
The Australian dollar
It has been in a downtrend since February as investors look favourably upon U.S., Asian equities while they continue to be cautious over European ones – but recent developments appear to be turning that trend around.
“The Australian dollar is currently trading at its lowest level against the U.S. dollar since early February, explaining some of this change in sentiment,” said Huang.”However, what has really caused the currency to appreciate is a strengthening of the euro which has been triggered by increased optimism amongst investors regarding European growth and industrial production, a situation that would likely have an upside potential for the Australian dollar.”
Although Europe’s economy is still recovering from last year’s recession, its economy did expand to a rate of 0.5% in the first quarter of 2016; however, it was not enough to prevent unemployment from increasing as expectations for a return to economic growth are still elusive.
What do you think will happen to the Aussie dollar?
The Aussie dollar is currently trading at its lowest level against the U.S. dollar since early February, explaining some of this change in sentiment; however, what has really caused the currency to appreciate is a strengthening of the euro which has been triggered by increased optimism amongst investors regarding European growth and industrial production.
Should I invest in the Aussie dollar?
Australia is one of the world’s leading economies, and its resource-rich economy is also set to benefit from any potential increase in demand. With China’s economy slowing down and the impact of the UK voting to leave the EU uncertainty still looms over global markets, this has provided a perfect opportunity for investors to capitalize on what could be an uptrend for some time.
What is considered “Top Trade Opportunities”?
Top trade opportunities are situations where current market expectations are not aligned with fundamental supply and demand factors that could potentially lead to very high (in excess of 20%) returns. First Sound Capital’s proprietary trading strategies are based on identifying these opportunities.
First Sound Capital’s investment strategies have consistently outperformed the benchmark indices, whilst managing risk. We are highly selective and only trade in a limited number of markets.
Our vast experience and knowledge of global economic trends and developments means that we can accurately identify the best time to enter into these markets with the intention of capitalizing on discrepancies that exist between fundamentals and current market price action. Please note that past performance is not indicative of future performance.
Why is the “Top Trade Opportunity” information distributed now?
Top trade opportunities are provided to our clients so that they may determine if the current level of risk is justified by the expected returns. Regardless of whether you buy or sell, we will always give our clients the highest level of service and always recommend a balanced investment strategy and asset allocation, including specific asset allocation strategies.
We are not affiliated with First Sound Capital and we do not provide investment advice. The information contained in this article may include financial product and service offerings of First Sound Capital Pte. Ltd. Investments in these products and services are not insured or guaranteed by the Singapore Government Securities Insurance Corporation (Sgsec) or the Government of Singapore.
