Month: February 2020

Australian Dollar Outlook Bearish as AUD/NZD Resumes Retreat

You may be surprised to learn that Australia's currency has been in a "bearish" state for quite some time. The fact that it has actually been out of a bearish state for several years now, and has remained so over the past few months, is something that many Americans would not be surprised to hear. Although they would probably agree that Australia was hit hard by the Euro crisis, they are much more concerned that Australia's economy might be facing a difficult time.

A number of factors have made this country more vulnerable than many of its peers. One of these factors is the surge in commodity prices over the past two years. Another factor is the fact that the Australian dollar has risen significantly in the past several months.

And yet another factor has been the "bad news" which the Australian government has published on its Economic Statement of the Government. One factor which has come under considerable criticism is the fact that the Australian government has said that the country has an excess of money, and therefore, cannot maintain its economic growth. These particular words were all the more harsh given that Australia is a part of the OECD (Organization for Economic Cooperation and Development) and has a strong trading relationship with the rest of the world.

This is a country that has had to deal with many economic problems throughout the past decade. At one point, Australia was considered a "nice place to do business" due to its "unmatched" political stability, and its willingness to take on the obligations which were imposed upon it by the International Monetary Fund (IMF).

Today, Australia is at risk of another financial meltdown, this time, over the country's currency. Not because it has run out of money, but because it has increased in value, even more than the US dollar.

According to John Keane, the founder of a respected brokerage firm, ANZ, Australia could be suffering from what has been termed as a "McDonald's effect." In other words, a constant and pronounced depreciation of the currency. He says that a number of banks have indicated to him that they are concerned about their liquidity.

Another problem which has been on the minds of a large portion of the Australian population, is that if the exchange rate rises, how will they be able to purchase necessities when the "big boys" do not supply them with the necessary amount of money? But the answer to this is that they will only be able to purchase necessities with the Australian dollar.

If you look at the purchasing power of the Australian dollar in relation to the US dollar, you can see that Australia is not far behind the US in terms of purchasing power. According to the Reserve Bank of Australia, the exchange rate with the US is relatively close to its average for the past four years.

This means that despite the fact that Australia's economy is currently thriving, it may not be able to maintain its current level of activity for very long. After all, this is a small nation, which does not have the resources that America possesses.

Although there is no immediate threat to the Australian economy, the problem of a weakening currency is causing a stir among analysts, as more experts begin to worry about the future of the Australian economy. If Australia's monetary policy continues to follow the path that it has taken in the past few years, then Australia will be forced to struggle to maintain its economic growth for the foreseeable future. In order to avoid the "McDonald's effect," Australia should adopt a very aggressive stance with regards to raising interest rates. The Australian government should recognize that if they continue on this path, they will eventually lead to a sharp fall in the country's currency.

Sterling Weakens Ahead of Preliminary EU-UK Trade Talks

Sterling could weaken ahead of Preliminary EU-UK Trade Talks as the UK's departure from the European Union makes it more likely that negotiations would need to take place at a higher level of speed. However, this does not mean that the UK cannot gain access to other markets, and the gains are huge.

Sterling is a very strong currency in the context of the rest of the world due to its relationship with the US Dollar. Therefore, this means that when the US Dollar depreciates against other currencies, then the pound can also depreciate (or rise) in the same way.

This will happen because countries outside the EU trade more and therefore they would have a greater desire to have access to these markets as well. It is possible that the UK will not be able to negotiate a bilateral deal that allows it to trade freely in one of these markets.

These trading partners include some of the largest economies in the world, namely the United States, Japan, Australia, Canada, and most importantly, the European Union. The EU comprises over 50% of the world's population and it has a trade volume roughly equal to the US and China.

If the UK were to continue on the same trading levels as it was at during the period prior to the UK's withdrawal from the EU, this would mean that the British economy would only compete against the economies of European countries. In addition, the UK would not be able to create its own external trading market, therefore it would only benefit from the trade deals it has with the EU and the USA.

Although the economy may experience a significant decline in trade over the next few years, the referendum will likely allow the UK to renegotiate some trade deals, and this can only be beneficial for the British economy. Sterling is also very attractive in comparison to theEuro as well as the US Dollar, so if it was seen that the UK could be able to maintain the current trading level, this would imply that the Bank of England was going to raise interest rates in order to maintain economic growth.

There have been many issues surrounding the negotiations of the Preliminary Trade Talks between the UK and the EU. In recent days, there has been much speculation regarding the issue of agriculture and animal welfare laws, which are needed to make sure that animals are treated humanely.

If the UK were to leave the EU on animal welfare grounds, then this would affect agricultural trade in the UK and this could lead to lower prices for consumers. Obviously, this would hit agricultural producers hard, but this could be considered a victory for consumers.

This could lead to more production, and therefore the country could become better off through increased trade deals, while other countries would not. The EU would benefit as well, as animal rights would put pressure on other countries in other fields, like in the fishing industry.

The ongoing debate could mean that Brexit becomes more likely, especially if the EU is able to win concessions on some of its trade deals with the UK. This is why the government must be careful in how it negotiates the deal.

For now, the Preliminary Trade Talks is going to be an extremely important part of the British economy. They can either boost the economy, or they can be extremely damaging, but if the negotiation goes smoothly, it could lead to great growth.