Money transfer tip: AUD rebound expected after decline
The Australian dollar is expected to rebound to 75 US cents even though it’s gone through a steady decline these past few months.
Last year it hit 74 US cents in December for the first time in two years, since then the Aussie dollar has fluctuated between 69 US cents to 79 US cents.
During COVID-19, many countries struggling to handle outbreaks saw their currency depreciate. However, aside from the pandemic, another issue is rising which is predicted to hurt many economies across the globe, including Australia: the Evergrande crisis.
If you haven’t heard of Evergrande that is okay, most people who aren't heavily invested in the global financial markets might not know this name. Evergrande is China’s second-largest property developer and they are struggling to keep up with $300 billion USD of debt. This major company runs the risk of going under and if it does it may cripple China’s economy, which, in turn, may hurt Australia’s economy because China is our largest trading partner.
OFX Currency Outlook October predictions said that the Evergrande crisis may cause economic global uncertainty that could lead to high inflation worldwide and “unfavourable conditions for commodity currencies like the AUD.”
“Despite the pessimistic outlook there is opportunity should there be any uptick in global sentiment, accelerating a broader AUD rebound towards 0.75 USD,” said the report.
In early October the AUD gradually rose from 71 US cents to 74 US cents.
Keep in mind that even if the market looks favourable, different banks and foreign exchange providers will still charge their own margins and fees on top of that. It’s a good idea to shop around and find the cheapest deals for your money transfer.
If you are looking to send money overseas or a forward contract, it might be a good time to keep an eye on the exchange rate to lock in a good rate. Compare the exchange rate between several providers below or jump to our international money transfers hub for more options.
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