IC Markets

Aussie Dollar To Remain Bullish due to Strong Economic Data

Australian Dollar - AUDIn December 2017, Australian Dollar turns bullish against G10 currencies. Particularly, the currency hit one and a half month high figure of 86.84 against Yen and one-month high figure of 0.7680 against Greenback.

The Kiwi Dollar fell to the one-month low figure of 1.1010 against Australian Dollar after poor current account and trade balance data. We hope the Australian Dollar to gain a strong position against its rival currencies in the near future due to the facts mentioned below.

Earlier this week, seaborne Fe 62% iron ore price registered 2-month high figure of $74.40 per ton as per the data provided by The Steel Index. Iron Ore which is the largest export revenue earner for Australia continued to remain volatile this year with a price range of $50 to $99. The average price of iron ore in 2017 was $70.60 as compared to $56.60 in 2016.

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Similarly, the price of coking coal which is primarily used by steel furnaces is trading at the 8-month high figure of $243.90. Since November 2017, there is 37% growth in coking coal prices. In 2017, the average trading price was $185.70 which is $40 more as compared to the average price in 2016.

The upbeat fiscal outlook issued by Australian Government also supports the Australian Dollar. In the midyear budget update, Treasurer Scott Morrison commented that deficit till June 2018 is likely to be around A$23.6 billion which was earlier predicted to be A$29.4 billion. For the financial year 2018-19, the deficit is likely to come down to A$20.5 billion. In the following financial year, the deficit is further likely to shrink to A$2.6 billion.

In the financial year 2020-21, the Australian Government is expecting a surplus of A$10.2 billion. This means that Australia is more likely to retain the AAA rating from S&P. This international credit agency has been closely monitoring Australia on its negative watch list. Hence, Australian Dollar is likely to remain bullish against its major currency rivals due to strong economic data and fiscal outlook. 

Steven Rudford

Steven Rudford

Hello, my name is Steven Rudford. Welcome to Top10FX.net. Follow my website for the most trustworthy Forex broker reviews and last minute financial trading news.


IC Markets

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