CAN THE AUSSIE REMAIN ON THE FRONT FOOT?

OBSERVATIONS | JULY 2017

Unlike the negotiations between Cricket Australia and its players, the Australian dollar has made noticeable progress recently. An important question for Australian investors and the economy is whether it will continue to advance, or whether this is just a short-term violation of a trading range.


For most of the past year, the Australian dollar has hovered around the USD 0.76 mark. Stronger relative economic growth, an interest rate premium, and ongoing Chinese economic strength are key reasons for capital being attracted to our shores.

Last week, however, the currency rallied sharply and broke USD 0.78 for the first time in two years. In this article, we look at why the currency has suddenly broken out of its trading range, and whether we think it will continue to advance.